July 11, 2016 - 6:00 PM EDT
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UPDATE1: Japan's wholesale prices down 4.2% in June

Japan's wholesale prices fell 4.2 percent in June from a year earlier for the 15th straight monthly drop, impacted by falling crude oil and commodity prices, as well as a strong yen, Bank of Japan data showed Tuesday.

The index of corporate goods prices stood at 99.2 against the 2010 base of 100, the central bank said in a preliminary report.

On a month-on-month basis, the index edged down 0.1 percent, after rising for the first time in a year in May, due apparently to the negative impact of the yen's sharp rise, particularly against the dollar.

As wholesale prices often affect consumer prices, the latest data underpinned the difficulty the BOJ faces in pursuing its 2 percent inflation target.

Prices of petroleum and coal products plunged 21.0 percent from a year earlier, and those of nonferrous metals slid 17.6 percent, reflecting softness in commodity markets. Prices of electricity, gas, and water marked a 14.1 percent fall.

Prices of agriculture, forestry, and fishery products, however, increased 3.5 percent from a year earlier, although the gain was apparently capped by the firming of the yen.

Crude oil prices have shown signs of recovering after sharp falls that weighed on Japan's wholesale prices, but they were still lower than levels a year ago, a BOJ official said.

"The yen has been strengthening and crude oil prices are not yet stable," the official said. "We will need to closely watch currency and crude oil markets as they create a broader trend (for prices)."

Export prices slumped 14.4 percent and import prices plunged 23.2 percent, both in yen terms. A strong yen tends to reduce costs for Japanese importers.

==Kyodo

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Source: Equities.com News (July 11, 2016 - 6:00 PM EDT)

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