Overall, Japan’s economy will continue to deteriorate, but the pace is expected to moderate gradually with the downward pressure from exports and inventories abating. Still, while the economy continues to be in a fragile state, continuous attention should be paid to the risk of a negative impact on the economy from developments in foreign and domestic financial markets.
With regard to prices, import prices are rising as the decline in international commodity prices has stopped and the yen has been weakening. Domestic wholesale prices continue to decline as a whole mainly in machinery and chemical products, although the decrease in the prices such as of electronic parts seems to have ceased.