— Japan CGPI Posts 16th Straight Y/Y Drop In Apr
— Japan Apr CGPI +0.4% M/M Vs Mar +0.2%
— Japan CGPI Posts 5th Straight M/M Rise

TOKYO (MNI) – Japan’s corporate goods price index fell 0.2% from a
year earlier in April, marking the 16th consecutive y/y drop, but the
rate of decline continued to slow from an unrevised -1.3% in March, data
released by the Bank of Japan on Monday showed.

The drop in the headline index was slightly smaller than the
consensus call of a 0.3% fall.

The index has been recovering steadily from the record 8.5% drop
marked in August and July 2009, which was the largest year-on-year drop
since the BOJ began compiling the data in 1960.

The overall index was helped a strong rise in prices of scrap and
waste, which surged 73.4% in April from a year earlier, compared with a
81.1% rise in March.

This sector pushed up the headline CGPI by 0.32 percentage point in
April, a BOJ official told reporters.

The official said that material prices have continued to rise due
to the global economic recovery driven by growth in China and other
emerging countries.

Prices of petroleum and coal products in the domestic market rose
28.3% from a year earlier in April, up from a revised 27.4% rise in
March.

This sector pushed up the headline CGPI by 1.40 percentage points
in April, the official said.

Prices of non-ferrous metals rose 24.3% on year in April (vs.
unrevised +19.9% in March) and those of chemicals and related products
gained 1.7% y/y (vs. revised +3.0% in March).

Non-ferrous metals pushed up the headline CGPI by 0.56 percentage
point in April.

Meanwhile, electric power, gas and water fell 12.0% from a year
earlier in April (vs. unrevised -17.2% in March) and iron and steel
prices fell 7.4% y/y in April (vs. revised -13.8% in March).

On a month-over-month basis, the CGPI was up 0.4% from the previous
month in April, compared with +0.2% in March, showing the fifth
consecutive m/m rise.

The BOJ official said that CGPI continued rising steadily on the
back of the recovery in emerging countries.

He also noted that firms tend to review and revise their prices in
April at the start of the new fiscal year.

The number of items whose prices fell from a year earlier totaled
468 (vs. 459 in March), or 54.7% of the basket (53.7% in March), while
the number of items whose prices rose came to 213, or 24.9%, up from
201, or 23.5%, in March, the BOJ official said.

In its semi-annual Outlook Report released on Apr. 30, the BOJ
said, “the domestic corporate goods price index (CGPI) is expected to be
positive on a year-on-year basis from fiscal 2010 onward due mainly to
the improvement in the aggregate supply and demand balance and to
developments in commodity prices.”

CGPI generally lags about six months after changes in the country’s
output gap, which was estimated by the Cabinet Office have shrunk to a
negative 6.4% (about Y30 trillion) in the fourth quarter of 2009.

tokyo@marketnews.com
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