TOKYO ⸺ Japan’s wholesale prices fell at a slower pace in February for a third straight month, offering an encouraging sign a recent rebound in fuel costs and pick-up in domestic demand will ease deflationary pressures across the economy.
The 0.7% year-on-year drop in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, follows a 1.5% annual decrease in January, Bank of Japan data showed on Thursday.
Oil prices fell 6.3% in February from a year earlier, a much smaller drop than a 14.4% decline in January, reflecting global rises in commodity and fuel costs, the data showed.
Steel and wood goods also rose last month thanks to a gradual recovery in domestic demand, a BOJ official told a briefing.
“Commodities prices continue to rise in March, though we’re still seeing a significant impact of the coronavirus pandemic on overseas and domestic economies,” the official said.
Domestic final goods prices, which loosely track the consumer price index, were off 0.1% from a year earlier, a much smaller pace of decline than a 0.8% drop in January.
The data comes ahead of the Bank of Japan’s policy meeting next week, where policymakers will debate ways to make their stimulus programme more sustainable as consumer inflation remains distant from the central bank’s 2% target.
Reporting by Leika Kihara; Editing by Shri Navaratnam; Reuters