— See Separate Table For Details Of Individual Forecasts

TOKYO (MNI) – Japan’s corporate goods price index (CGPI) is
expected to have risen 1.2% on year in December, with the pace of
increase slowing from +1.7% in November due to smaller gains in
commodity prices, according to the median forecast by economists
surveyed by Market News International.

The Bank of Japan will release the December CGPI data at 0850 JST
on Monday, Jan. 16 (2350 GMT Sunday).

An expected 1.2% rise would be the smallest gain since December
2010, when the index also rose 1.2% on year.

Consumer electronics prices have been falling due to weak demand
while concerns about a further slowdown in the global economy are
putting downward pressure on prices of basic materials such as steel and
non-ferrous metal products, said Akiyoshi Terabayashi, economist at
Norinchukin Research Institute.

Commodity prices, the key driver behind the recent gains in CGPI,
are not rising as sharply as before amid slower global growth. The
continued strong yen is also lowering import costs.

The BOJ’s overseas commodity index — composed of 17 items
including crude oil, copper, gold, wheat and beef — stood at 191.6
(against 100.0 for the 2005 base year) in December, up only 5.4% on
year, slowing from +16.5% in November and +20.8% in October.

The dollar-yen exchange rate averaged Y77.8 in December, compared
with Y77.5 in November and Y83.4 in December 2010.

Looking ahead, Kyohei Morita, chief economist at Barclays Capital,
forecast that CGPI will show a year-on-year fall around April for the
first time since -0.1% in September 2010.

** Market News International Tokyo Newsroom: 81-3-5403-4838 **

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