Japan producer price inflation slows to 6.8% in September

Japan’s producer price inflation slowed more than expected in September, with the annual rate easing to 6.8% from 7.6% in the previous month. The Producer Price Index (PPI) fell 0.3% month-on-month for the second consecutive month, according to data from the Bank of Japan.

The slowdown was largely driven by declines in agricultural, forestry, and fishery prices, which dropped 13.3% annually, and a deceleration in petroleum and coal products. However, price pressures remain elevated in several industrial sectors. Annual price growth rose in chemicals, plastics, and information and communications equipment. Nonferrous metals also maintained exceptionally high inflation rates.

This cooling of corporate goods prices may reduce the immediate urgency for the Bank of Japan to implement further interest rate hikes following its recent policy move. While traders anticipate potential rate changes by December or January, the mixed data suggests that while wholesale inflation is moderating, underlying industrial cost pressures persist.