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TOKYO (MNI) – Japan’s corporate goods price index for October is
expected to have risen 0.6% on year, posting the largest gain since
December 2008, when the index rose 0.9%, a survey of economists by
Market News International showed.
CGPI likely posted the first y/y gain in October since +0.4% in
June 2010 after falling 0.1% in September, being unchanged in August and
slipping 0.1% in July.
The Bank of Japan will release the data on Thursday, Nov. 11.
Economists said termination of the surcharge, which had been
imposed on electric power consumption during the summer months, appeared
to have pulled down the October y/y gain by 0.2% percentage point.
In addition prices of some manufactured items such as consumer
electronics have continued to fall while the recent strong yen is
exerting downward pressure on import prices, they said.
However, other factors pushed up producer prices.
Azusa Kato, economist at BNP Paribas, said the tobacco tax hike on
Oct. 1 is estimated to have raised CGPI by 0.3% percentage point.
According to the Ministry of Finance, prices of tobacco were raised by
around 41% after the tax increase.
Also, strong demand for some materials including iron and steel and
non-ferrous metals in Asian nations likely helped push up CGPI. Iron and
steel prices raised CGPI by 0.04% point in September from the previous
month.
Moreover, the sharp 6.8% drop in CGPI marked in October 2009 likely
helped expand the y/y growth in October this year, economists said.
CGPI declined significantly in the autumn of 2009 due mainly to the
plunge in demand that was triggered by the collapse of Lehman Brothers
in September 2008.
The Bank of Japan said in its semi-annual Outlook Report released
on Oct. 28 that CGPI is expected to increase gradually, posting +0.9% in
fiscal 2010 and +0.5% in fiscal 2011.
Meanwhile, CGPI likely fell 0.2% m/m in October, showing the first
drop since -0.5% in May after being unchanged for three months through
September.
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