Japan August PPI +0.3% m/m (expected +0.1%)

<p>Japan PPI, AKA Corporate Goods Price Index.</p><ul><li>This is 'wholesale' level inflation, the price that firms charge each other for products (more on this under the screenshot)</li><li>

the annual rate, at 3.2%, slowed in August for the eighth straight month</li><li>July was revised down to 3.4%</li><li>peaked at 10.6% y/y in December last year</li></ul><p>—</p><p>The Producer Price Index (PPI) in Japan is also known as the Corporate Goods Price Index (CGPI)</p><ul><li>its a measure of the average change over time in the selling prices received by domestic producers for their output</li><li>is calculated by the Bank of Japan</li></ul><p>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.</p><p>The PPI reflects some of cost pressures faced by producers</p><ul><li>its based on a basket of goods that represents the range of products produced within the Japanese economy, including items such as:<ul><li>raw materials like metals and chemicals</li><li>semi-finished goods</li><li> and finished products</li><li>different weights are assigned to each category within the index based on its contribution to the overall economy.
</li></ul></li><li>it does not account for the quality improvements in goods and services over time, which might lead to overestimation of inflation<ul><li>additionally, it reflects only the prices of domestically produced goods, leaving out the impact of imported goods</li></ul></li></ul><p>The PPI can be used as a guide to inflationary pressures in the economy:</p><ul><li> If producers are facing higher costs, they may pass these on to consumers, leading to higher consumer prices.
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This article was written by Eamonn Sheridan at www.forexlive.com.