Japan data: November PPI +0.2% m/m (expected+0.2%) +0.3% y/y (expected 0.1%)

<p>The driver of the yen the past week or so has been feverish, and misplaced, expectations of an imminent Bank of Japan policy pivot. USD/JPY collapsed last Thursday and has recovered almost to where it started to drop. </p><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.</li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.