Japan’s wholesale prices contract, auto demand brings optimism

Japan’s wholesale prices recorded a 2.2% decline in November year-on-year. The drop came to be the sharpest decline in six months, indicating that the coronavirus drag is still in the air and is restraining the economy under deflationary pressure.

According to data released by the Bank of Japan, the corporate goods price index (CGPI) came parallel with a median market forecast. It followed a 2.1% drop seen in October, marking the largest fall the index had recorded in an annual basis after a 2.8% contraction in May.

While there was a decline, some products recovered as global automobile demand advanced. Wholesale prices are one of the key indicators of the consumer price index, serving as an essential gauge that helps BOJ in deciding monetary policy.