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Wholesale prices fell 3.1% in January

Kyodo

Japan’s wholesale prices dropped 3.1 percent in January from a year earlier for the 10th straight month of decline, with a slowing Chinese economy and oversupply concerns leading to lower crude oil and other commodity prices, the Bank of Japan said Wednesday.

The index of corporate goods prices stood at 100.1 against the 2010 base of 100, the central bank said in a preliminary report. The decline followed a revised 3.5 percent fall in December.

Prices of petroleum and coal products plunged 20.1 percent from a year earlier due to diminishing demand in China and a lack of output adjustments by oil-producing countries.

Prices of nonferrous metals fell 13.8 percent, reflecting declines in international prices amid risk-averse moves globally, a BOJ official said.

“There are moves to avoid risks in the international financial and capital markets,” the official said. “Under such circumstances, the commodity markets see dwindling funds because price fluctuations are large and risks high.”

In addition to declines in international market prices, a firming yen may push down wholesale prices in Japan in the future, the official added.

Among other products, prices of iron and steel fell 6.2 percent, while those of scrap and waste dived 29.7 percent.

Meanwhile, prices of food and beverages increased 1.3 percent.

Export prices fell 6.9 percent and import prices shed 17.8 percent, both in yen terms.

On a month-on-month basis, the price index fell 0.9 percent in January, down for the eighth straight month.