Current Price Momentum Analysis in Japan

This document is a technical report analyzing the current price momentum in Japan's economy, focusing on both upstream and downstream stages. It discusses the recent trends in the Consumer Price Index (CPI), which showed a year-over-year increase of 4.0% in October, down from 4.2% the previous month. The report highlights that while the corporate price index rose by 0.8%, indicating a general weakening of prices, it is premature to conclude that price momentum is eroding. The document further examines the final demand and intermediate demand price index (FD-ID Index) published by the Bank of Japan, detailing the trends in various stages of price movements. It notes that the resilience of price momentum is influenced by rising service prices and wages, which are expected to support the Bank of Japan's inflation target. The report concludes by discussing potential risks to consumption and the economy, emphasizing the importance of wage negotiations in maintaining price momentum.