Key Features of Japan's Final Demand-Intermediate Demand Price Indexes during the Post-2020 Inflationary Episode

April 6, 2026

KIHO Yuka^*1
MUTO Ichiro^*2
SHINOZAKI Kimiaki^*3
SHINTANI Kohei^*4

Research and Statistics Department
Bank of Japan

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Abstract

The period of rising prices since 2020 has heightened interest in how price pressures from upstream stages are transmitted downstream. This study investigates the price developments over the period 2020-2025 using the Final Demand-Intermediate Demand Price Indexes (FD-ID price indexes), which reorganize producer prices by stage of production. We first compare FD-ID price indexes for Japan and the United States. The results show that, in Japan, price increases varied substantially across production stages, whereas such cross-stage dispersion was relatively limited in the United States. A decomposition of the Japan-U.S. differences in price increases by stage indicates that, at upstream stages, Japan experienced larger price increases than the United States, particularly for goods such as energy and raw materials. At downstream stages however, Japan recorded smaller price increases than the United States across a wide range of goods-producing sectors. We then examine developments in Japan's FD-ID price indexes. The evidence suggests that, across many sectors, price increases at upstream stages were accompanied by stronger price increases at downstream stages than in the past. Taken together, these results suggest that (i) even during the post-2020 inflationary episode, the overall degree of goods price pass-through by Japanese firms remained relatively restrained when compared with the United States and that (ii) goods price pass-through in Japan nevertheless became more active across many sectors relative to the pre-2020 period.

1. *1Research and Statistics Department, Bank of Japan
   E-mail : yuka.kihou@boj.or.jp
2. *2Research and Statistics Department, Bank of Japan
   E-mail : ichirou.mutou@boj.or.jp
3. *3Research and Statistics Department, Bank of Japan
   E-mail : kimiaki.shinozaki@boj.or.jp
4. *4Research and Statistics Department, Bank of Japan (Currently, Personnel and Corporate Affairs Department)
   E-mail : kouhei.shintani@boj.or.jp

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