Japan's wholesale prices rose 0,2 percent in 2019 for the third consecutive year of growth, but gains slowed with lower oil prices, impacted by prolonged trade tensions between the United States and China, the Bank of China reported. Japan this Thursday.
An increase in consumption taxes to 10% in October also contributed to the price, and if the impact of the tax increase is excluded, the country's wholesale prices would have dropped 0,2% last year, the BOJ said.
"Lower commodity prices, including crude oil, weighed on wholesale prices due to increased tensions between the two largest economies in the world," a BOJ official told a news conference.
The United States and China formally reached a partial trade agreement on Wednesday, including a reversal of some U.S. tariffs on Chinese products and an increase in Chinese purchases of US agricultural products.
But the BOJ official said that "the central bank will closely monitor developments in trade negotiations between the US and China" as it would have a major impact on the price of oil and other commodities.
In 2019, the commodity price index traded between companies stood at 101,5 against the 100 base of 2015, according to a BOJ report.
The prices of non-ferrous metal products fell 5,2%, while those for oil and coal fell 4,8%. Pulp and paper prices rose 5,8%.
In December, wholesale prices rose 0,9% over the previous year due to the increase in oil prices amid the decrease in US-China trade tensions in the reference month.
Excluding the impact of the increase in consumption taxes, however, wholesale prices in December would have fallen 0,7%, said the BOJ.
Source: Bank of Japan / Mainichi