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Japan's Cost of Production Inflation Cools For Third Month
Tuesday, 14 October 2008 00:15:01 GMT  |  Luis Gil, DailyFX.com
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The September cost of producing Japanese goods rose at a slower pace than in the previous two months. Falling oil prices have weighed in on the Domestic Corporate Goods Index, which climbed 6.8% compared to 7.2% in August and 7.3% in July.

With the Bank of Japan signaling deterioration in the domestic business sector, the fall in wholesale prices may add to corporate profitability in the months to come. Bank members last month also signaled that they believed decreasing oil prices would continue to abate inflationary pressures that have plagued this metric in 9 of the 10 months through July.

Bullish momentum in the Yen may have also been a factor in slowing the price metric. As volatility has incentivized investors to dump their carry trades, the Asian currency has been forced to rise. Import costs thus fall as a result.

USDJPY traded at 102.67 at 20:13 EST


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