Japan October PPI Surges to 7.1%, Beating Forecasts as Capital Flow Data Shows Sharp Reversal

Japan's producer price index rose 7.1% year-over-year in October, well above the 6.5% consensus forecast and accelerating from September's 6.8% reading. On a month-over-month basis, PPI jumped 0.7%, a sharp swing from the prior month's decline of 0.3% and more than double the 0.3% estimate, signaling broadening upstream price pressures in the Japanese economy.

Security flow data for the week ending November 6 showed a sweeping reversal in cross-border investment activity. Japanese investors turned net sellers of foreign bonds, offloading 537.6 billion yen after buying 1,312.0 billion yen the prior week, and also dumped 643.9 billion yen in foreign stocks after net purchases of 1,077.7 billion yen. On the other side, foreign investors pulled 105.2 billion yen from Japanese equities, reversing a prior inflow of 1,129.3 billion yen, while their purchases of Japanese bonds moderated to 1,371.1 billion yen from 1,481.7 billion yen.