Japan's producer price index (PPI) rose 2.7% on year in August but slipped 0.2% from July, according to the Bank of Japan preliminary data on Thursday.

The PPI had risen by a revised 2.5% on-year in July.

Pushing up the PPI in May were beverage and foods, up 0.03% on year, and fossil fuels, up 0.05%, among other items.

In contrast, electric power, gas and water bills fell 0.22% on year in August.

The PPI measures prices at the factory gate, or those charged to businesses and distributors. It is distinct from the consumer price index (CPI), which measures prices in retail locations.

Japan's export price index, on a contract currency basis (generally, US dollars) declined 1.1% on year in August, while the import price index fell 4.6% on year, added the Bank of Japan.