MNI BRIEF: Japan July CGPI Rise Slows to 3.6% From June's 4.3%

The year-on-year rise in Japan's corporate goods price index slowed to 3.6% in July from June's revised 4.3% for the seventh straight deceleration, indicating that upstream cost increases have peaked, data released by the Bank of Japan Thursday showed.

Pass-through of cost increases continued downstream, such as beverages and mainly frozen foods. The time lag between firms transferring high costs to retail prices also slowed, with solid private consumption enabling them to raise retail prices, but the pace of pass-through is slowing.

The CGPI rose 0.1% m/m due to higher prices for petroleum and coal products. Although electric power, gas and water charges fell following the 0.1% decline in June. July’s rise was the lowest level since March 2021 when it rose 1.0% y/y, for the 29th straight y/y rise and was due mainly to lower prices for electric power, gas and water, and chemicals and related products.

The July import price index fell 14.1% on a yen basis, for the fourth straight drop following June’s revised 11.4% drop. Upward pressure from import prices continued to weaken.