Producer prices in Japan rose by 4.0% year-on-year in February 2025, matching market expectations and following a 4.2% increase in January, which had marked the fastest growth in 20 months.
Japan producer prices rise as estimated
This was the 48th consecutive month of producer inflation, reflecting ongoing cost pressures across various sectors of the economy. The increase in producer prices was driven by further price hikes in most components, although at a slightly slower pace in some cases compared to the previous month.
Notable price increases were seen in transport equipment, which rose by 1.7%, up from 1.6% in January, and beverages and foods, which saw a 2.6% rise, a slight dip from 2.7% in the previous month. The petroleum and coal sector experienced a significant price jump, increasing by 4.7% compared to 2.6% in January, reflecting global energy market fluctuations. Other sectors, including electrical machinery (3.5%), production machinery (3.1%), and general-purpose machinery (4.2%), all reported price increases, signaling continued inflationary pressures across industrial and manufacturing sectors.
Not all sectors experienced price growth
However, not all sectors experienced price growth. Prices for chemical products dropped by 0.9%, compared to a smaller decline of 0.2% in January, while iron and steel prices fell by 1.5%, worsening from a 1.3% decrease the previous month. Additionally, the lumber and wood sector saw a more pronounced price drop of 2.4%, following a 3.4% decline in January, reflecting challenges in those industries.
Despite the continued year-on-year rise in producer prices, the monthly figures were less dynamic. In February, producer prices remained unchanged, following a 0.3% increase in January. This was in contrast to expectations of a 0.1% decrease, suggesting that inflationary pressures may be stabilizing after months of steady increases. This stagnation in the monthly figures reflects a potential moderation in the pace of cost rises, possibly due to the combination of global supply chain adjustments, changes in raw material prices, and broader economic factors.
