— Japan Nov CGPI Posts 2nd Straight Y/Y Rise
— Japan Nov CGPI +0.1% M/M Vs Oct Rev +0.1%
— Japan Nov CGPI Posts 2nd Straight M/M Rise

TOKYO (MNI) – Japan’s corporate goods price index rose 0.9% from a
year earlier in November, the second consecutive y/y rise in the wake of
higher international commodity prices, data released by the Bank of
Japan Friday showed.

The November rise accelerated from a revised 0.8% gain (preliminary
+0.9%) in October, the data show.

The November figure came in slightly weaker than the median
forecast in a Market News International survey for +1.0%.

The November y/y rise was the largest since December 2008, when it
also was up 0.9%, a BOJ official told reporters.

It is the first time since November and December 2008 that the CGPI
has risen from a year earlier for two consecutive months, the official
said.

Producer prices posted solid gains in October and November this
year because of sharp 6.8% and 5.0% drops in CGPI seen a year earlier.

The official said the BOJ continues to closely watch developments
in international commodity prices and how much they will filter through
to final goods prices in Japan.

On a year-on-year basis, the November CGPI was mainly pushed up by
higher prices for iron and steel, processed foodstuffs, petroleum and
coal products, nonferrous metal as well as utilities.

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

In May 2010, the CGPI rose 0.5%, marking the first y/y gain since
December 2008. It was followed by a 0.4% rise in June.

In today’s data, prices of processed foodstuffs were up 2.7% from a
year earlier after rising 2.7% in October. This pushed up the CGPI by
0.33 percentage point.

Petroleum and coal products were up 5.5% in November from a year
earlier after rising a revised 5.5% in October, pushing up the CGPI by
0.32 percentage point.

Prices of iron and steel rose 8.8% on year in November,
accelerating from a 8.2% rise in October and pushing up the CGPI by 0.51
percentage point.

Scrap and waste prices were up 19.3% on year in November, slowing
from a revised 19.7% in October. This boosted the CGPI by 0.10
percentage point.

Prices of nonferrous metals rose 8.6% on year in November, slowing
from a 8.7% rise in October. This raised the CGPI by 0.22 percentage
point.

From the previous month, the CGPI rose 0.1% in November, posting
the second consecutive m/m rise after rising a revised 0.1% in October.

Month on month, the positive contributions from mainly petroleum
and coal products (+0.04 percentage point) and nonferrous metals (+0.04
pt) offset the negative contributions from electric power, gas and water
(-0.04 pt) and iron and steel (-0.02 pt).

The number of items whose prices fell from a year earlier totaled
369 in November (vs. 387 in October), or 43.2% of the basket (45.3% in
October), while the number of items whose prices rose came to 322, or
37.7%, up from 308, or 36.0%, in October, the BOJ official said.

The BOJ said in its latest monthly economic report released last
month, “Domestic corporate goods prices are expected to be somewhat weak
for the time being, since the effects of the yen’s appreciation to date
are likely to remain.”

In its semi-annual Outlook Report released on Oct. 28, the BOJ
board projected that CGPI will rise gradually, posting +0.9% in fiscal
2010 and +0.5% in fiscal 2011.

CGPI generally lags about six months after changes in the country’s
output gap (excess capacity vs. demand), which is estimated by the
Cabinet Office to have shrunk to -3.5% in the July-September quarter
from a revised -4.3% in April-June.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

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