Wholesale prices fell 3.4 percent in February from a year earlier on cheap oil and a firmer yen, the Bank of Japan said Thursday. It was the 11th straight month of decline.
The index of corporate goods prices stood at 99.8 against the 2010 base of 100, the central bank said in a preliminary report. The decline followed a revised 3.2 percent fall in January.
Prices of petroleum and coal products dived 21.8 percent from a year earlier, while those of electric power, gas and water slid 12.5 percent. This reflected an underlying trend of cheaper crude oil.
Prices of nonferrous metals fell 12.5 percent and those of scrap and waste plunged 26.9 percent.
“Declines in commodity prices after the start of this year likely reflect a slowdown in the Chinese economy and a weaker U.S. dollar amid receding expectations for a U.S. rate hike,” a BOJ official said.
As for Japan, a firming yen has brought down import prices and pushed down domestic prices, the official added.
Export prices dropped 7.9 percent and import prices plunged 17.8 percent, both in yen terms.
Meanwhile, prices of food and beverages rose 0.9 percent, while prices of pulp, paper and related products gained 0.8 percent.
On a month-on-month basis, the price index fell 0.2 percent in February, down for the ninth straight month, but the decline was smaller than a revised 1.0 percent drop in January.
“As China has referred to fiscal spending, risk-averse mood seems to have been receding to some extent, bolstering stocks and commodity markets,” the official said, adding such a turnaround is expected to lift prices despite the firming yen.