Japan’s wholesale prices decline in September, posing deflation risk

September had seen Japan’s wholesale prices dropping 0.8% from a year ago, data showed on Monday. The drop came to be the seventh consecutive month of year-on-year declines, tipping back the world’s third-largest economy into deflation.

The corporate goods price index (CGPI) recorded a 0.8% drop, placing sharper than the 0.5% median forecast rendered by markets. The figure also placed higher than the 0.6% year-on-year drop recorded in August.

Wholesale prices had seen a 0.1% decrease from August to September. This came to be the first on-month drop in four months, data from the Bank of Japan (BOJ) showed.

The weakness in wholesale prices was mainly from weak global demand for commodities and machinery products. Moreover, this underscored the challenge that the country faces in minimizing the economic impact of the coronavirus crisis.