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Economy

Japan's wholesale prices fall 0.9% in August on lower oil prices

Trade war contributes to 3rd straight monthly drop, biggest since December 2016

Crude oil and commodity prices plunged, due largely to growing concerns over the escalating U.S.-China trade war.

TOKYO (Kyodo) -- Japan's wholesale prices fell 0.9 percent in August from a year earlier due to lower crude oil and commodity prices amid escalating trade tensions between the United States and China, the Bank of Japan said Thursday.

The price of goods traded between companies dropped for the third consecutive month and marked the largest decline since December 2016, when they fell 1.2 percent.

Prices for oil and coal products tumbled 9.9 percent while nonferrous metal products decreased 5.3 percent.

"Crude oil and commodity prices such as copper plunged in the reporting month due largely to growing concerns over escalating trade conflicts between Washington and Beijing," said a BOJ official.

Washington decided to impose 15 percent tariffs on $300 billion worth of Chinese products in two stages from September and December while China began levying up to 10 percent tariffs on $75 billion worth of U.S. products in September.

"Growing concerns over the U.S.-China trade tensions will negatively affect the global economy and weigh on prices at home and abroad. We will closely watch developments," the BOJ official told reporters.

Chemical products lost 4.7 percent, reflecting the plunge in prices of crude oil, the raw material of the products, while prices for scrap and waste dived 21.7 percent due to weak demand in China resulting from the U.S.-China tariff spat.

Export prices fell 5.7 percent while import prices dropped 8.3 percent, both in yen terms, due to the yen's advance against the U.S. dollar.

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