Japan’s wholesale inflation fell more than economists expected, with the Domestic Corporate Goods Price Index shedding -2.2% in the year to March versus expectations of a -1.8% result. The reading is the lowest in nearly 7 years and points to further downward pressure on consumer prices (the benchmark inflation gauge) as firms pass on lower manufacturing costs via cheaper finished products. The current downturn could substantially accelerate if expectations of falling prices become entrenched, encouraging consumers and businesses to perpetually put off spending and investment waiting for the best possible bargain.
