Why Investors Care
The corporate goods price index focuses on the prices of goods transacted between companies. It is Japan's version of the producer price index. The index reflects the price level for the supply and demand of individual industrial goods. This index is calculated by the BoJ Research and Statistics Department. Three indexes are contained in this release - the domestic corporate goods price index, the export price index and the import price index. It is the domestic index that market players follow. The CGPI comprehensively tracks input price pressures; however, the CGPI has a track record of increasing and not necessarily feeding through to the CPI because of weak demand. But if an increase in the CGPI is followed by a rise in the CPI, concerns about inflation may prompt the Bank of Japan to raise interest rates.