With regard to prices, wholesale prices continue to fall, and the year-to-year increase in consumer prices(excluding the effects of institutional changes such as the rise in the consumption tax rate) has been declining close to zero.
As for consumer prices, the year-on-year rate of decline diminished to 0.1 percent in August due mainly to the special factors, such as the increase in medical treatment costs in April and the rise in tobacco tax in July.
As for consumer prices, they were likely to gradually stop declining and remain flat thereafter, as it was highly probable that the domestic supply-demand balance would improve moderately, and that the effect of the strong yen would weaken eventually.
As for consumer prices, the year-on-year rate of change may temporarily be zero percent or slightly above due to the rise in rice prices. However, they are basically projected to continue falling gradually, since the imbalance between supply and demand in the economy still remains considerably large despite its gradual improvement.
Prices continued to trend upward reflecting the rise in crude oil prices and the depreciation of the euro. In September, consumer prices in the euro area rose by 2.8 percent from a year earlier, exceeding for four consecutive months the European Central Bank's definition of price stability of a year-on-year increase of below 2 percent.
With regard to prices, wholesale prices have declined reflecting a slack in supply and demand conditions of goods. Meanwhile, consumer prices have remained at a level slightly above that of the previous year when observed excluding the effects of institutional changes such as the rise in the consumption tax rate.
Consumer prices continued to be somewhat weak, despite rising petroleum product prices, due to a decline in prices of imported products(excluding petroleum products) and domestic products competing with these imports. The financial environment Private banks' lending remained sluggish, decreasing by about 2 percent from a year earlier, although its year-on-year rate of decline had stopped expanding.
As for price developments, although domestic corporate goods prices were rising marginally reflecting the rise in prices of materials, and consumer prices were virtually level, the overall assessment was that moderate deflation was continuing given that the GDP deflator continued to decline and consumer prices had been pushed up by temporary factors.
This development is mainly attributable to the rise in prices of petroleum products and the diminishing effects of the decline in rice prices and the reduction in electricity and telephone charges. However, even excluding the effects of such factors, the rate of change in consumer prices has turned slightly positive, so that it is increasingly likely that this positive trend will become established.
Adjustments were made in view of the outlook for the economy and prices, with the Bank judging that sustained economic growth would continue with a virtuous circle of production, income, and spending in place, and that consumer prices would be likely to increase moderately in the long run in line with the"understanding of medium- to long-term price stability.
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