The key gauge of consumer prices in Tokyo fell 0.2 percent in August from a year earlier, marking a record 59th straight month of decline, the government said Friday.

These data indicate deflation continues to affect the economy.

The consumer price index for Tokyo’s 23 wards, excluding perishable food prices, stood at 97.5 against the 2000 base of 100, the Public Management, Home Affairs, Posts and Telecommunications Ministry said in a preliminary report.

The 0.2 percent dip was worse than an average market projection of a 0.1 percent fall. Analysts attributed the decline to smaller-than-expected rises in oil product prices and sharper-than-expected declines in clothing prices.

Consumer prices in Tokyo are viewed as a leading indicator of prices nationwide.

The nationwide CPI for July, excluding perishables, dropped 0.2 percent from a year earlier to 97.9, marking a fifth straight month of fall.

Financial markets closely monitor CPI data as the Bank of Japan says it will maintain its quantitative credit-easing policy until year-on-year changes in the index stabilize above zero.

“The latest data made us realize that the possibility of the economy fulfilling the condition (for credit tightening) by the yearend has receded significantly,” said Takahide Kiuchi, senior economist at Nomura Securities Co.

“Despite recent spikes in crude oil prices, deflationary pressure is expected to continue hitting the economy.”

Regarding the August CPI for Tokyo, items that saw a sizable fall in price included personal computers and other durable goods for entertainment and educational purposes.

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