MNI BRIEF: Japan May CGPI Rises 3.2% Y/Y; Import Price Drops

Japan’s corporate goods prices slowed in May but remained higher than Bank of Japan projections, supported by persistent cost pressures in labour, logistics and key commodities, data released by the BOJ on Wednesday showed.

The Corporate Goods Price Index rose 3.2% y/y in May, decelerating from April’s revised 4.1%, as gains were tempered by weaker petroleum and coal product prices (+0.6% vs. +6.3%) and falling nonferrous metal prices (-2.1% vs. +4.2%).

On a monthly basis, the CGPI fell 0.2%, marking the first drop since August 2024, after a 0.3% rise in April.

Import prices on a yen basis fell 10.3% y/y, a fourth consecutive decline, following April’s -7.3%, reflecting ongoing disinflationary pressures from overseas.

Looking ahead, corporate price hikes are expected to continue from June, with firms emboldened by stable retail sales despite previous increases.

BOJ officials remain focused on how private consumption, which still lacks momentum, will respond to the combination of rising nominal wages and sustained high prices. (See MNI POLICY: June Tankan To Offer BOJ View On Rate Hike Path)