The Bank of Japan's preliminary data for December 2025 reveals a mixed picture in corporate goods prices, marked by a significant divergence between rising industrial input costs and a sharp drop in domestic fuel prices.
📊 Major Index Movements (December 2025)
Producer Price Index (PPI): Increased modestly by 0.1% from November 2025, with the year-on-year inflation rate for producer goods easing to 2.4%.
Export Prices (in Contract Currency): Rose significantly by 1.0% month-on-month, driven largely by strong gains in electronics and metals.
Import Prices (in Contract Currency): Increased by 0.6% month-on-month, with rising costs for industrial metals and electronics partially offset by falling energy prices.
🔍 Key Sector Contributors to Price Changes
The overall price changes were driven by specific sectors:
Driving PPI Increases: Nonferrous metals (like copper and silver) were the largest contributor (+0.22%), followed by smaller gains in agriculture and machinery.
Offsetting PPI Increases: Petroleum & coal products (gasoline, gas oil) pulled the index down (-0.31%), with electricity and gas also having a minor negative effect.
Boosting Export Prices: Electric & electronic products (e.g., memory chips) contributed a substantial +0.73%, and metals (like gold and copper) added +0.30%.
Boosting Import Prices: Metals (platinum, palladium scrap) contributed +0.45%, and electronics added +0.35%.
Curbing Import Price Rises: Lower costs for petroleum, coal & natural gas (crude oil, LNG) reduced the overall increase by -0.24%.
💎 The Core Insight
The December 2025 data highlights a divergence between the industrial and consumer sectors. Surging global prices for metals and key technology components are pushing up business input and export costs. However, this inflationary pressure is being tempered for domestic producers and consumers by a notable decline in energy product prices.
