Japan's PPI is also known as the Corporate Goods Price Index. Its an indicator to 'wholesale' inflation.
Data post earlier is here ICYMI:
Japan wholesale inflation slows, but yen import prices edge higher
Japan’s January CGPI rises 2.3% y/y, slowing from 2.4%.
In line with market expectations.
Yen-based import price index up 0.5% y/y.
Weak yen continues to feed cost pressures.
Data feeds into BOJ inflation assessment after December rate hike.
Japan’s wholesale inflation slowed for a second consecutive month in January, though rising yen-denominated import costs highlight ongoing price pressures linked to currency weakness.
Data from the Bank of Japan showed the corporate goods price index (CGPI) rose 2.3% year-on-year in January, easing from 2.4% in December and matching market expectations. The CGPI tracks the prices companies charge one another for goods and services and is viewed as a leading indicator of pipeline inflation.
While the moderation suggests producer-level price momentum is gradually cooling, the currency channel remains active. An index measuring yen-based import prices increased 0.5% from a year earlier, following a revised 0.2% rise in December. That uptick underscores how a weaker yen continues to lift the cost of imported raw materials and energy, even as global commodity pressures stabilise.
For policymakers, the mixed signals complicate the inflation narrative. The Bank of Japan has been assessing whether underlying price growth is sustainably anchored around its 2% target. In December, the BOJ raised its policy rate to 0.75%, a 30-year high, marking another step away from decades of ultra-loose monetary policy and near-zero borrowing costs.
The central bank has indicated it will continue to evaluate whether cost-push pressures are translating into more durable demand-driven inflation. A sustained rise in import prices due to yen weakness could delay the full cooling of producer costs, while the gradual slowdown in headline wholesale inflation suggests that peak pressures may be behind.
Markets will likely interpret the data as broadly consistent with the BOJ’s cautious normalisation path, neither forcing immediate tightening nor derailing the case for gradual policy adjustment if inflation dynamics remain firm.
