Wholesale prices fell 3.9 percent in July from a year earlier for a 16th straight monthly drop, dragged down by a strong yen and falling crude oil and commodity prices, Bank of Japan data showed Wednesday.
The index of corporate goods prices stood at 99.2 against the 2010 base of 100, the BOJ said in a preliminary report.
As wholesale prices tend to affect consumer prices, the data points to the difficulty the BOJ faces in achieving its 2 percent inflation target.
Although crude oil prices have shown signs of recovering, they are still lower than a year ago. The yen’s advance, accelerated by Britain’s vote to exit the European Union in late June, also cuts import costs.
“We saw the impact of the strong yen on various products,” a BOJ official told a briefing.
Prices of petroleum and coal saw a 19.5 percent year-on-year fall, and those of nonferrous metals slid 14.2 percent. Scrap prices were down 17.8 percent.
Concerns about China’s economic growth weighed on prices of iron and steel, sending them 6.1 percent lower from a year ago.
The BOJ official said it is hard to predict how prices will move, as various factors are intertwined.
“We will need to watch crude oil and other commodity prices and currency moves,” he added.
Among those marked year-on-year gains, prices of production machinery and business-oriented machinery rose 1.2 percent each.
Export prices were down 14 percent and import prices slumped 21.7 percent, both in yen terms.
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