Reply #13: Japan Producer Prices Fall at Fastest Pace Since 2002 (Update2)

[ozymandius]

April 13 (Bloomberg) -- Japan’s wholesale prices fell at the fastest pace in almost seven years, adding to signs the world’s second-largest economy may return to deflation.

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The Bank of Japan’s quarterly Tankan survey this month showed manufacturers expect the costs they pay for goods and materials to fall to the lowest level in seven years. Expectations of lower prices ahead can prompt consumers to delay purchases, eroding corporate profits and forcing firms to cut wages, causing a downward spiral in demand.

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Prices tumbled a revised 1.6 percent in February compared with the same month a year earlier. They fell 0.2 percent in March from February, when they dropped a revised 0.5 percent, the central bank said.

The Bank of Japan’s overseas commodity index, which shows changes in costs including oil, steel, copper and wheat, slid 49.3 percent in March.

http://www.bloomberg.com/apps/news?pid=20601068&sid=aQBd.i0hOr.A&refer=economy