According to its estimation, the output gap has remained positive for eight consecutive quarters since the October-December quarter of 2016, on the back of the steady tightening of labor market conditions and a rise in capital utilization rates (Chart 8).
Domestic wholesale prices (adjusted for seasonal electricity rates) have almost stopped declining, reflecting the depreciation of the yen and the rise in oil prices to date as well as the moderate improvement in domestic supply and demand conditions, particularly in construction goods. The year-to-year decline in corporate service prices is narrowing gradually. Consumer prices (nationwide, excluding perishables) are marginally above the previous year’s level.