Japan's producer price index (PPI) rose 4% on year in February but unchanged from the month prior, reported the Bank of Japan on Wednesday.

The PPI had risen by 4.2% on-year in January.

The two biggest contributors to the PPI in February were transportation equipment and beverage and foods, which increased 1.7% and 2.6% on year, respectively, during the month under review.

In contrast, lumber and wood products, chemicals and related products as well as iron and steel fell on year.

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. The PPI is considered a precursor to future movements in the CPI, as retailers try to recoup costs.

Japan's export price index, on a contract currency basis, rose 0.5% in February from the month prior, while the import price index fell 0.5% on year, added the Bank of Japan.