Japan wholesale prices post first rise since 2000

Wholesale prices nationwide edged up in March from a year earlier for the first increase in three years and eight months, the Bank of Japan said Tuesday in a preliminary report.

The prices, measured by the central bank's corporate goods price index, registered 95.5 against the base of 100 for 2000, up 0.2 percent from the year-before level. In February, the CGPI was unchanged from a year earlier, although it rose 0.3 percent from the previous year.

It is the first time since July 2000 that the key wholesale price index has registered a year-on-year rise, signaling that deflationary pressures have been easing in inter-business transactions amid robust exports to other parts of Asia and increasing domestic demand, the BOJ said.

Chief Cabinet Secretary Yasuo Fukuda said: "This seems to be a turning point, something that is different from before and can been seen as a plus. Overcoming deflation is what the government has been trying to achieve for years, and I think we will have to continue our efforts to fight deflation in coordination with the Bank of Japan."

The CGPI is designed to show movements of the prices of goods traded among companies. Introduced in December 2002, the index is an updated edition of the 1995-base wholesale price index.

Rises in the prices of steel and nonferrous metal products led the overall gain in prices, reflecting an uptrend in prices of raw materials bound for the booming Chinese market.

Steel prices increased 10.7 percent from a year earlier, while nonferrous metals prices moved up 13.4 percent.

March export prices fell 2.7 percent in yen terms from a year earlier but rose 1.3 percent from February. In terms of contract currencies, export prices gained 1.2 percent on a year-on-year basis and 0.4 percent on a month-on-month basis.

Import prices fell 2.1 percent in March from a year earlier in yen terms but were up 2.3 percent from February. In terms of contract currencies, they rose 4.0 percent from a year earlier and 0.9 percent from February.