Japan’s Producer Prices Unchanged in December

Jiji Press

11:06 JST, January 17, 2024

TOKYO (Jiji Press) — Japan’s producer prices in December stood unchanged from a year earlier, the slowest pace of increase in 34 months, the Bank of Japan said Tuesday.

The producer price index, which measures the cost of goods traded between businesses, stood at 119.9 against the 2020 base of 100. In November, the index was up 0.3%.

The deceleration in growth in December reflects slower moves to pass on increases in energy and materials costs to prices, following a fall in resources prices and a halt in the yen’s depreciation.

Prices rose for 404 of the 515 items surveyed, and fell for 92.

Prices of food and beverages gained 4.4%, still impacted by higher materials prices. Prices of ceramic, stone and clay products jumped 11.6%.

On the other hand, prices of electric power, gas and water plummeted 27.6% because of government subsidies aimed at reducing the burden of higher utility costs. Iron and steel prices fell 3.4% due in part to a drop in fuel prices.

The central bank also said that the yen-based import price index in December declined 4.9% year on year, down for the ninth consecutive month. On a contract currency basis, the import price index dropped 9.5%.

For the whole of 2023, the country’s producer price index rose 4.1% from the preceding year to 119.6, logging the highest level since comparable data became available in 1980 for the second straight year. But the pace of rise slowed from the 2022 level of 9.8%.

Moves to pass on higher materials costs to prices are slowing, a BOJ official said.