Japan’s producer prices ease in July, still remain in red

Producer prices in Japan set an easing tone during the month of July, although still remaining in red, an encouraging sign that the country is slowly battling the odds of deflation.

The producer price index came in at zero last month, an improvement from June’s 0.1 percent month-on-month contraction and expectations prices would decline by as much. Year-on-year, prices at the factory gate slipped 3.9 percent in July, but again, this was an improvement on June’s 4.2 percent contraction and the 4 percent drop expected by economists.

Moreover, export prices added 0.2 percent on month and fell 3.4 percent on year, the data showed, while import prices gained 1.4 percent on month but tumbled 10.9 percent on year.

However, the incremental improvements are unlikely to take the pressure off the Bank of Japan to find ways to lift prices, with recent speculation the central bank may consider changing the timeframe in which it could possibly achieve its 2 per cent core inflation target, reports said.

Meanwhile, the most recent consumer price index data for June showed that the Japanese economy still remains stuck in a state of deflation, but these, too, did not come in worse across the board than the previous month.