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March corporate goods price index down 2.2%

April 14, 2009
By Ken Worsley


Yesterday, the Bank of Japan released its monthly Corporate Goods Price Index, and the report showed a 2.2% decrease in March wholesale prices compared to a year ago. Wholesale prices have now fallen for three consecutive months, and the fall last month was the largest on record since 2002.

Last August, wholesale prices shot up 7.1% and hit a 27 year high, as commodity prices peaked out. Reuters goes as far to say that “[W]ith both domestic and external demand faltering, Japan could be the slowest among major economies to recover from recession.” This, of course, does not jive with Prime Minister Taro Aso’s New Year’s promise that Japan will be the first nation to recover from the global recession.

A spectre is haunting Japan - the spectre of deflation. In both January and February, the core consumer price index remained flat, and February’s overall index showed a decline of 0.3%. There is now a strong expectation that March core CPI will show the first decline since September 2007. It appears as though there is a clear output gap, and inventory is not moving - household spending was down 3.5% in February.

Filed Under Bank of Japan, Corporate Price Index, Economic Reports 

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Comments

One Response to “March corporate goods price index down 2.2%”

  1. J on May 8th, 2009 7:07 pm

    it was a stupid move for them to raise prices last summer, the oligarchies of each industry (not a true free market) such as dairy-decided to raise prices to cash in on the gas price boom-however, the idiots didn’t reduce the prices after that so it is natural if those specific things, such as dairy go down considering their price was raised on high gas prices, in fact they have been “milking” it for a while now by not bringing prices down quicker, I for one have refused to pay over a certain price for milk and bread on principle-lead to the freezer being stocked with bread…

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