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Wholesale prices decline in Japan

JAPAN'S central bank said yesterday that wholesale prices fell 6.6 percent in June from a year earlier, the biggest fall on record, and sparked deflation concerns.

The Bank of Japan's corporate good price index, which tracks the cost of a wide range of products sold domestically, declined for the sixth straight month. On a monthly basis, prices slipped 0.3 percent from May.

The yearly fall was the largest since the central bank began keeping data in 1960.

Deflation can hurt economic growth because it cuts into company profits as prices fall. It can also lead consumers to delay purchases on the expectation that prices will fall further, and increase debt burdens.

Last month, another key indicator also showed prices were falling in Japan. The government said the country's consumer price index fell at a record pace in May, the third straight monthly decline.


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