The Corporate Goods Price Index (CGPI) measures the average price level for a fixed basket of capital and consumer goods purchased by Japanese producers. It is Japan's version of the Producer Price Index (PPI) and is released by the Bank of Japan (BoJ) Research and Statistics Department. The CGPI reflects the month-over-month and year-over-year changes in price level for the supply and demand of industrial goods. The CGPI release contains three sub-indices and they are 1. domestic corporate goods price index 2. export price index and 3. import price index. This index was previously called the wholesale price index.
This report helps investors to predict the movement in the CPI as variations in prices of input materials and the cost of manufacturing will affect the retail prices. The CGPI comprehensively tracks price pressures for input materials and increases in the index will often cause an upward movement in the CPI as well. If this situation occurs, concerns about inflation may prompt BoJ to increase interest rates.
See also: Producer Price Index (PPI)