Wholesale prices in March fell 0.4 percent compared with a year ago as the global spread of COVID-19 weighed on a wide range of economic activities, the Bank of Japan said Friday.
Prices for goods traded by companies fell for the first time in five months as a recent drop in crude oil prices impacted Japan after climbing 0.8 percent in February.
By item, oil and coal products plunged 10.3 percent, reflecting the price war between Russia and Saudi Arabia in March and plummeting demand caused by the worldwide spread of the coronavirus.
Nonferrous metal products fell 7.6 percent, while prices for scrap and waste plummeted 29.6 percent in line with demand.
Excluding the impact of the Oct. 1 consumption tax hike to 10 percent from 8 percent, wholesale prices only fell 2.0 percent from the previous year, the weakest result since November 2016, when they sank 2.3 percent.
"The spread of the COVID-19 is expected to continue to have a negative impact on the global economy and prices in Japan," said a BOJ official, adding the central bank will closely monitor developments.
In yen terms, import prices lost 7.7 percent and export prices 5.1 percent from the previous March.
For fiscal 2019 ended March 31, wholesale prices rose 0.2 percent, up for the third year straight but slower in pace due to the fall in crude prices.
The rise was weaker than the 2.2 percent figure for fiscal 2018 due largely to falling demand for crude caused by the U.S.-China trade war in the first half and the coronavirus pandemic, the BOJ official said.
Prices for oil and coal products fell 4.6 percent while nonferrous metal product prices dropped 4.7 percent. Prices for pulp and paper products rose 5.2 percent, while those ofr ceramic, stone and clay products climbed 3.3 percent on rising material costs.
Without the impact of the consumption tax hike, wholesale prices dropped 0.6 percent, posting the first decline in three years.
Import prices dropped 6.1 percent while export prices fell 4.1 percent, both in yen terms.
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