Japan July wholesale prices post record annual drop

TOKYO, Aug 12 - Japanese wholesale prices fell a record 8.5 percent in the year to July, Bank of Japan data showed on Wednesday, reflecting a plunge in commodity and energy prices from their peaks last year.

The fall in the corporate goods price index (CGPI) was slightly smaller than a median market forecast for an 8.7 percent drop and followed a revised 6.7 percent annual drop in June.

Wholesale prices have fallen from a 27-year high last August as the global financial crisis has sent commodity prices tumbling.

The falls are likely to moderate later this year as the effect of last year's spike in oil prices wears off but economists expect deflation to persist given weak demand in the world's No. 2 economy.

Overall final goods prices -- the prices of finished products charged to businesses -- fell 4.7 percent from a year earlier in July. Domestic final goods prices, which loosely track the consumer price index, dropped 3.3 percent.

Details were as follows (preliminary, with percentage change; economists' median forecast in parentheses; some previous figures may be revised):

JULY JUNE MAY APR JULY INDEX

Year-on-year -8.5(-8.7) -6.7 -5.5 -3.9 102.9

Month/month +0.4( 0.0) -0.4 -0.5 -0.6 -- To view the full tables, go to http://www.boj.or.jp/en/type/stat/boj_stat/cgpi/cgpi0907.pdf