The October domestic Corporate Goods Price Index (CGPI) rose 7.1% year on year and 0.7% month on month, exceeding market expectations. As the yen continued to weaken, import prices also rose sharply by 24.8% in yen terms, and the data is viewed as supporting expectations of a Bank of Japan rate hike.
The October CGPI rose 7.1% year on year and 0.7% month on month. The increase exceeded the median market forecast, indicating an acceleration in transaction prices between companies.
Market expectations that the Bank of Japan will move to raise interest rates in the near term remain strong. With the next Monetary Policy Meeting scheduled for 17–18 December, the latest price data is expected to draw close attention as an input into the policy decision.
Import prices in yen terms rose 24.8% year on year, accelerating from a 23.8% increase in September. With the yen continuing to weaken, the data confirmed that import costs for raw materials are being pushed higher again.