Japan's corporate goods prices fall 1.3% on year in March

11:16, April 13, 2010      

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The price of corporate goods in Japan fell by 1.3 percent in March compared with the same month last year, statistics released by Bank of Japan (BOJ) showed on Tuesday.

The fall left the corporate goods price index (CGPI) at 102.6, where 100.0 is equal to the average prices for fiscal 2005.

On a month-to-month basis, the CGPI actually posted a rise of 0. 2 percent, in a sign that the worse of the deflationary period Japan has been suffering may be over.

March marks the 15th consecutive month of on-year decline for wholesale prices in Japan, after the effect of the high-price of oil receded from the country. Last August, the country experienced a record 8.5 percent drop in its CGPI.

Japan has also had to deal with an economic downturn since the credit crisis that started in the latter half of 2008.

For fiscal 2009, prices fell 5.2 percent overall, leaving the average index for the year standing at 102.6.

Export prices from Japan also fell by 2.2 percent on a yen basis, while on a contract currency basis they rose by 2.5 percent. Imports, meanwhile, saw their price increase by 4.4 percent on a yen basis and 11.1 percent on a contract currency basis for the month.

Japan is currently facing problems with deflation, as the nation's prices continue to fall amid improving economic circumstances. The CGPI, which tracks prices in business-to- business transactions, is loosely connected to the consumer price index.

The Bank of Japan and the government of the Democratic Party of Japan (DPJ) have both raised concerns about falling consumer prices and taken steps to try to prevent them from having a damaging effect on the overall economy.



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