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* Wholesale price in December -2.0% yr / yr vs f’cast -2.2%
* Decline reflects sluggish crude oil and fuel prices – BOJ data
* The shortage of auto parts drives up the prices of certain products (overhauls with breakdown of price movements, context of price outlook)
TOKYO, Jan.14 (Reuters) – Wholesale prices in Japan fell 2.0% in December from a year earlier due to falling fuel costs, data showed on Thursday, a sign that the coup at the demand of the coronavirus pandemic is weighing on the world’s third-largest economy.
The pace of the decline was slower than the 2.3% drop in the previous month, however, as a rebound in global demand and hopes for vaccine rollouts pushed up the prices of some commodities.
The decline in the Business Goods Price Index (CGPI), which measures the prices that businesses charge each other for their goods and services, was below a median market forecast for a decline of 2.2%, according to Bank of Japan data.
The data highlights the possibility that wholesale prices will narrow their downside margin in the coming months, if expectations of a global recovery continue to push up the prices of crude oil and other commodities.
Prices for some chemicals and electronics rose in December on firm demand for auto parts, a sign that strong demand for manufactured goods around the world was supporting inflation, the data showed.
Japanese automakers, including Toyota Motor Corp and Honda, have had to shut down production at their overseas factories due to a semiconductor shortage as the pandemic disrupted supply chains.
But the blow to the economy from the coronavirus pandemic will keep any recovery in overall prices modest, analysts say.
“Given the recent upsurge in infections, the coronavirus pandemic will continue to weigh on wholesale prices,” a BOJ official said in a briefing. (Reporting by Leika Kihara; editing by Richard Pullin)
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