MNI DATA IMPACT: Japan Aug CGPI -0.9% Y/Y; Lowest Dec 2016

     TOKYO (MNI) - Japan's corporate goods price index posted a third straight

year-on-year drop in August, with the index falling to the lowest level since

December 2016 when it fell 1.2% on year, data released by the Bank of Japan

Thursday showed.

     August CGPI fell 0.9% on year following a 0.6% fall in July and a 0.2% dip

in June, which was the first year-on-year drop in 30 months.

     A BOJ official said CGPI was weighed by weak international commodity prices

on the back of the sustained trade friction and the underlying trend of CGPI

hasn't changed, although they accepted upside pressure from beverages and foods

had peaked.

     Prices for consumer goods fell 2.1% on year in August, widening from a 1.7%

fall in July.

     The official downplayed the view that weak consumer goods prices reflected

consumers' weak demand, saying that consumer goods included weak energy items.

     The BOJ official didn't touch on the outlook for CGPI, or whether it is

expected to continue falling this year.

     On the month, the CGPI fell 0.3% in August, for the first drop in two

months following 0.0% in July.

     Japan's CGPI isn't directly linked to government's consumer price index,

but the latest data does indicate the outlook for CPI remains weak.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: M$A$$$,M$J$$$]