Japan's Wholesale Inflation Cools to Weakest in Over Two Years

Declines in Global Commodity Costs and Certain Goods Prices Contribute to Slowdown

Japan's wholesale inflation slowed to 0.8% in October, the weakest in over two years, indicating cooling inflation.
The slowdown was due to declines in prices for wood, chemical and steel products, reflecting the impact of falling global commodity costs.
The data showed a continued sharp decline in lumber and utilities costs compared to the previous year.
The yen’s recent slide beyond the ¥150 level against the dollar may renew upward moves in import costs, which the central bank will need to monitor closely.
The Bank of Japan has stated that the recent cost-push inflation must be replaced by price rises driven more by robust domestic demand, and accompanied by wage growth, for it to consider ending ultra-low interest rates.