Wholesale prices dropped 2.4 percent year on year in January, excluding the impact of last April’s consumption tax hike, to mark the fastest fall in four years as crude oil prices continued to fall, the Bank of Japan said Thursday.
The corporate goods prices index fell for the third consecutive month to 100.5 against the 2010 base of 100. It was the biggest fall logged among comparable data since January 2011, the central bank said in the preliminary report.
In December, the index fell a downwardly revised 1.0 percent.
Oil prices have plummeted more than 50 percent since mid-2014 amid a glut in global supply caused by U.S. shale oil and OPEC’s refusal to reduce output.
Prices for petroleum and coal products in Japan, which is dependent on imported energy, sank 23.1 percent, while prices for chemical and related products, which are usually affected by oil prices, fell 4.7.
Before excluding the effects of the 3-point tax hike on April 1, the index grew 0.3 percent for its 22nd straight monthly gain to 103.3, the smallest since April 2013, when the index rose 0.1 percent. In December, it climbed a downwardly revised 1.8 percent.
“Falls in wholesale prices will continue for the time being,” a BOJ official told a press briefing after the data was released. The official said fewer companies are transferring rising import costs in raw materials and energy caused by the weakened yen, to their wholesale prices.
Prices for imports fell 6.6 percent and those for exports grew 2.7 percent last month from a year before in yen terms, the BOJ said.
On a monthly basis, the wholesale price index fell 1.3 percent from December, the fastest slide in six years. It lost a downwardly revised 0.5 percent the previous month.
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