— Japan June CGPI -1.3% Y/Y; MNI Poll Median Forecast: -1.0%
— Japan May CGPI -0.7% Y/Y Under 2010 Base Yr; MNI Fcast -0.6%
— Japan June CGPI Posts 3rd Y/Y Drop in Row
— Japan June CGPI Y/Y Drop Largest Since -1.3% in Mar 2010

TOKYO (MNI) – Japan’s corporate goods price index slumped 1.3% on
year in June amid lower prices for gasoline, chemicals and nonferrous
metals, posting the largest drop in over two years on slower global
demand, data released Wednesday by the Bank of Japan showed.

The June drop was larger than the median forecast for a 1.0% fall
in a MNI survey of economists and marked the biggest year-on-year drop
since -1.3% marked in March 2010.

It was the third straight year-on-year fall under the new 2010 base
year, following -0.7% (vs. MNI’s median forecast for -0.6%) and -0.4% in
April.

The BOJ has released revisions to the past figures of the index,
reflecting the change in the base year and the data formula that takes
place every five years.

Last week, the BOJ reported that the year-on-year change in the
corporate goods (producer) price index was lowered by an average 0.5
percentage point in the wake of the base year change to 2010 from 2005.

The 0.5 percentage point fall in a 16-month period between January
2011 and April 2012 was smaller than the 0.7 percentage point drop when
the BOJ adopted the 2005 base year for CGPI over five years ago.

The April CGPI fell 0.4% on year under the new 2010 base year,
compared with -0.3% under the 2005 base year.

International commodity prices have been falling on weak demand in
slowing emerging economies, exerting downward pressures on CGPI.

From the previous month, CGPI fell 0.6% in June, marking the second
month-on-month drop, led by gasoline and other refined crude oil
products as well as chemical products.

The number of CGPI items whose prices rose from a year earlier
totaled 273 in June, or 33.2% of the basket, while the number of items
whose prices fell came to 473, or 57.5%.

It is the fourth straight month that the number of decliners has
exceeded that of gainers.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4833 **

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