MNI BRIEF: Japan July CGPI Rises 2.6% Y/Y; Import Price Drops

Japan’s corporate goods price index (CGPI) rose 2.6% y/y in July, easing from June’s unrevised 2.9%, while import prices posted a sixth straight decline, Bank of Japan data showed Wednesday.

Price gains were weighed by slower increases in beverages and foods (+4.2% vs +4.5%) and a drop in electric power, gas and water (-0.1% vs +3.2%).

The CGPI rose 0.2% in July after a 0.1% fall in June, marking the first increase in three months.

Import prices in yen terms fell 10.4% y/y in July after June’s 12.2% drop, extending downward pressure on overall prices. Automobile export prices to the U.S. fell 24.4% y/y in yen terms and 18.4% in contract currency terms, compared with -26.4% and -19.4%, respectively in June. 

The data indicate Japanese carmakers continue to lower export prices, eroding profitability.

BOJ officials are monitoring how automakers’ price-setting evolves and the implications for wage growth.