FILE: The Bank of Japan’s head office in Tokyo, photographed June 5, 2010. Photo: katorisi / Wikimedia Commons, CC BY-SA 3.0 (cropped and resized). This cropped photo is distributed under CC BY-SA 3.0.
Japan’s producer prices rose 7.1% in October from a year earlier, accelerating from September’s 6.8% increase as energy and industrial materials pushed up costs for businesses, preliminary Bank of Japan data showed Thursday morning in Japan.
The producer price index increased 0.7% from September, reversing a revised 0.2% monthly decline. The index stood at 136.8 on a base of 100 for 2020, according to the central bank’s November 12 release.
The figures track prices of goods traded between businesses. They are not a measure of the prices households pay at stores, and the 7.1% annual increase should not be read as Japan’s consumer inflation rate.
Energy and materials drive the monthly increase
Petroleum and coal products contributed 0.20 percentage point to the monthly producer-price increase. Chemicals added 0.15 percentage point, as did electricity, gas and water. Iron and steel contributed another 0.11 percentage point, the BOJ’s breakdown showed.
Those contributions identify where the monthly pressure came from. They do not mean each of those categories rose by that percentage. The report names heavy fuel oil, naphtha and jet fuel among the petroleum products contributing to the increase, and xylene, ethylene and propylene among chemicals.
Excluding extra charges for summer electricity, the producer price index rose 0.9% from the previous month. The BOJ says that measure adjusts for extra electricity charges applied during the July-to-September summer season.
Imported goods become more expensive
The yen-based import price index rose 3.3% in October from September and 24.8% from a year earlier. On a contract-currency basis, which separates out currency conversion into yen, import prices increased 2.3% during the month and 19.2% over the year.
The gap matters for Japanese businesses buying goods abroad: their yen-denominated costs reflect both the prices agreed with suppliers and exchange-rate movements. The report also showed a 1.0% monthly increase in its dollar-yen exchange-rate measure.
Export prices increased 0.6% from September on a contract-currency basis, while the yen-based export index rose 1.1%.
A business-cost signal, not a policy decision
The release provides a fresh measure of price pressure working through Japan’s goods economy. Whether businesses absorb those costs or pass them on to customers varies by product and market.
The figures are preliminary and may be revised. The report is a statistical release, not an announcement of a new interest-rate decision or a commitment about the Bank of Japan’s next policy move.
JBizNews Desk | Economy
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