Japan PPI (June 2024) +0.2% m/m (expected +0.4) and +2.9% y/y (expected +2.9%)

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Still
solid
rises
for
inflation
at
the
wholesale
level.

USD/JPY
is
little
changed
around
161.36

—

The
Producer
Price
Index
(PPI)
in
Japan
is
also
known
as
the
Corporate
Goods
Price
Index
(CGPI)

• its
  a
  measure
  of
  the
  average
  change
  over
  time
  in
  the
  selling
  prices
  received
  by
  domestic
  producers
  for
  their
  output
• is
  calculated
  by
  the
  Bank
  of
  Japan

Unlike
the
Consumer
Price
Index
(CPI),
which
measures
the
price
change
that
consumers
see
for
a
basket
of
goods
and
services,
the
CGPI
focuses
on
the
change
in
the
prices
of
goods
sold
by
companies.

The
PPI
reflects
some
of
cost
pressures
faced
by
producers

• its
  based
  on
  a
  basket
  of
  goods
  that
  represents
  the
  range
  of
  products
  produced
  within
  the
  Japanese
  economy,
  including
  items
  such
  as:
  • raw
    materials
    like
    metals
    and
    chemicals
  • semi-finished
    goods
  • and
    finished
    products
  • different
    weights
    are
    assigned
    to
    each
    category
    within
    the
    index
    based
    on
    its
    contribution
    to
    the
    overall
    economy.
• it
  does
  not
  account
  for
  the
  quality
  improvements
  in
  goods
  and
  services
  over
  time,
  which
  might
  lead
  to
  overestimation
  of
  inflation
  • additionally,
    it
    reflects
    only
    the
    prices
    of
    domestically
    produced
    goods,
    leaving
    out
    the
    impact
    of
    imported
    goods

The
PPI
can
be
used
as
a
guide
to
inflationary
pressures
in
the
economy:

• If
  producers
  are
  facing
  higher
  costs,
  they
  may
  pass
  these
  on
  to
  consumers,
  leading
  to
  higher
  consumer
  prices.