Wholesale prices dropped 3.6 percent from a year earlier in August, the largest decline in five years and eight months, due to falling crude oil prices, the Bank of Japan said Thursday.
The index of corporate goods prices decreased for the fifth straight month to 102.7 against the 2010 basis of 100, the central bank said in a preliminary report.
Excluding effects of last year’s 3 percentage point consumption tax hike to 8 percent, the index also dropped 3.6 percent to 99.8, down for the 10th consecutive month.
The fall in the index came as prices for petroleum and coal products plunged 26.2 percent, while chemical and related products saw a 7.7 percent drop amid concerns about the outlook for the Chinese economy.
Prices for iron and steel were down 4 percent in the reporting month.
“We need to keep monitoring Chinese economic conditions,” a BOJ official said.
The results underlined the difficulty faced by the BOJ in achieving its 2 percent inflation target, given that consumer prices tend to track wholesale prices.
Among gainers, prices for farm products rose 1.3 percent and those for textile goods climbed 1 percent.
Export prices increased 3.4 percent while import prices dropped 9.6 percent, both in yen terms.
On a monthly basis, the price index excluding the tax hike impact fell 0.6 percent in August for the third straight monthly decline, the data showed.