Japan’s July wholesale prices drop 0.6% on lower crude oil prices
Japan’s wholesale prices fell 0.6 percent in July from a year earlier due largely to lower crude oil prices amid prolonged U.S.-China trade tensions, the Bank of Japan said Tuesday.
The prices of goods traded between companies dropped for the second straight month and marked the biggest decline since December 2016 when they fell 1.2 percent.
“Growing concerns over the trade conflict between the United States and China weighed on prices of crude oil and a wide range of commodities such as copper and aluminum,” a BOJ official told reporters.
Prices of oil and coal products fell 8.2 percent from a year earlier, the largest drop since September 2016 when they plunged 13.4 percent.
U.S. President Donald Trump said in late June when he visited Osaka to attend a Group of 20 meeting that his administration will resume trade talks with China.
But he announced earlier this month that Washington will impose 10 percent tariffs on $300 billion worth of Chinese products starting Sept. 1 after failing to strike a deal at ministerial negotiations in Shanghai in late July.
“Crude oil and commodity prices continue to fall this month. These moves could trigger a global decline in prices and we will closely monitor developments,” said the BOJ official.
Prices of nonferrous metal products dropped 6.7 percent due partly to a slowing economy in China stemming from the tit-for-tat trade war between the world’s two largest economies.
Chemical product prices declined 3.7 percent due to oversupply in China and falling crude oil prices, while scrap and waste prices plunged 19.9 percent because of weak demand in overseas markets, according to the BOJ’s monthly report.
Utility prices rose 3.9 percent as electric power companies raised bills from the reporting month.
Export prices fell 4.7 percent while import prices dropped 8.1 percent, both in yen terms, due partly to the yen’s advance against the U.S. dollar.