Corporate service prices fell in April for the seventh month in a row as commodity costs tumbled and the recession weakened demand for transportation and advertising, the Bank of Japan said Tuesday.
The prices that businesses pay for services such as deliveries and rent slid 2.4 percent from a year earlier, the BOJ said. The drop accelerated from a 2.1 percent decrease in March.
The report adds to evidence that deflation may again rear its head as companies and consumers cut spending. The BOJ forecasts two years of declining retail and wholesale prices.
"The economy's rapid decline has prompted companies to cut costs across the board, hurting demand for services," said Azusa Kato, an economist at BNP Paribas in Tokyo. "It's difficult to expect earnings to improve anytime soon, pressuring companies to keep trimming spending and lowering corporate service prices."
Prices for transportation services fell 9 percent in April, faster than a 7.5 percent drop in March.