Japan’s wholesale prices record fastest drop on virus-beaten demand

May had seen Japan’s wholesale prices dropping at their most rapid annual pace in nearly four years, data showed on Wednesday. This could be attributed to the disruptions brought by the coronavirus pandemic, halting business activity and dragging global demand for commodities.

The corporate goods price index (CGPI) had plunged 2.7% in May from a year earlier. The weak reading placed below the median market forecast of a 2.5% contraction, records from the Bank of Japan showed.

The data also revealed that weak oil costs placed the index at its lowest level since October 2016, following a 2.4% decline in April.  

Analysts believe that oil recovery may alleviate prices in the coming months. However, wholesale inflation is expected to suffer further as the coronavirus crisis presses.