The Producer Price Index of Japan rose by 1.5 percent year-on-year in December 2018, slowing from a 2.3 percent increase in the previous month and below market expectations of 1.8 percent. It was the lowest producer inflation rate since March 2017, as prices eased for petroleum & coal products (4.7 percent vs 14.2 percent in November), chemicals (1.4 percent vs 2.6 percent), general purpose machinery (0.2 percent vs 0.8 percent), lumber wood products (1.1 percent vs 1.3 percent), iron & steel (4.4 percent vs 4.6 percent), and beverages & food (1.1 percent vs 1.2 percent). Additionally, cost declined further for information & communications equipment (-1.3 percent vs -1.0 percent) and non ferrous metals (-4.1 percent vs -3.6 percent). In contrast, prices rose at a faster pace for pulp & paper (3.3 percent vs 2.1 percent) and plastics (2.5 percent vs 2.4 percent). On a monthly basis, producer prices fell 0.6 percent after a 0.3 percent drop in the prior month. Producer Prices Change in Japan averaged 1.42 percent from 1961 until 2018, 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 2.90 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 2.40 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.