August wholesale prices remained stalled for the sixth straight month at February's level, dragged down by price falls in home electronics, clocks and information technology-related goods, the Bank of Japan said Monday.
Year-on-year, wholesale prices were down 0.9 percent, falling for the 23rd consecutive month, reflecting the deflationary trend. But the rate of year-on-year decline slipped below 1 percent for the first time in 13 months. The domestic wholesale price index came to 94.4 against the base 100 for 1995.
Although a surge in demand for beef and other agricultural goods brought a 1.3 percent price rise from July, the gains were canceled out by a continued slump in consumer demand for IT-related goods, the BOJ said.
The continued weakness in wholesale prices is expected to fuel political pressure on the BOJ to ease money further and halt sliding prices.
Ideas suggested by ruling coalition members include increasing the BOJ's purchases of Japanese government bonds and having the BOJ, along with the government Pension Investment Fund, buy exchange-traded funds.
BOJ Gov. Masaru Hayami recently said the latter suggestion -- aimed at shoring up slumping share prices -- was unlikely, as it is unauthorized under the Bank of Japan Law.
The BOJ in March last year began pumping the banking system with excess funds to bring interest rates down, while at the same time arguing that its monetary policies would not help the economy much without banking reform.