Japan’s Wholesale Prices Miss Forecast, Deflation Fears Rise - Forex News by FX Leaders
Japan's Wholesale Prices Miss Forecast, Deflation Fears Rise

Japan’s Wholesale Prices Miss Forecast, Deflation Fears Rise

Posted Monday, October 12, 2020 by
Arslan Butt • 1 min read

Wholesale prices in Japan fell for the seventh consecutive month during September, raising fears of a risk of deflation in the country. According to data released by the BOJ, wholesale prices or the CGPI fell by 0.8% YoY in the month of September, after falling by 0.6% in the previous month.

The decline was even steeper than economists’ forecast, which was for a 0.5% fall instead. On a monthly basis, the CGPI fell by 0.1% from August – the first monthly decline seen since four months.

The continued decline in wholesale prices is likely to drive consumer inflation weaker, indicating a contraction in domestic consumption, and heightens concerns that Japan could experience deflation. Markets are expecting the BOJ to revise its inflation forecasts lower from the current 2% target at its rate review meeting later this month.

According to a BOJ official, “With the global economy still reeling from the pandemic’s pain, the pace of its recovery remains modest. That will weigh on Japan’s wholesale inflation.”

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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