The Producer Price Index of Japan declined by 0.6 percent year-on-year in July 2019, following a 0.1 percent drop in the previous month and compared to market expectations of a 0.5 percent fall, This was the biggest yearly decrease in producer prices since December 2016, amid further fall in cost of chemicals (-3.7% vs -2.5%), petroleum products (-8.2% vs -5.7%), non-ferrous metals (-6.7% vs -9.4%), business oriented machinery (-0.8% vs -0.6%), electronic components & devices (-0.2% vs -0.5%), electrical machinery & equipment (-1.4% vs -1.3%), and transport equipment (-0.3% vs -0.2%). In addition, prices slowed for beverages & foods (0.9% vs 1.1%), and plastic products (0.7% vs 1.4%). Meanwhile, prices went up slightly faster for iron & steel (1.2% vs 1.1%), metal products (2.1% vs 2%), and production machinery (1.3% vs 1.2%). On a monthly basis, producer prices were flat in July, after a 0.5 percent drop in June. Producer Prices Change in Japan averaged 1.41 percent from 1961 until 2019, reaching an all time high of 33.90 percent in February of 1974 and a record low of -8.60 percent in August of 2009.
Producer Prices Change in Japan is expected to be -0.30 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Producer Prices Change in Japan to stand at 1.50 in 12 months time. In the long-term, the Japan Producer Prices Change is projected to trend around 1.80 percent in 2020, according to our econometric models.