TOKYO: Japan’s core inflation picked up for the first time in 10 months in March, data showed on Friday, offering a sliver of hope for the Bank of Japan, which has been struggling to beat years of deflation.
Core inflation, excluding volatile fresh food prices, rose 2.2 percent year-on-year in March, logging the first increase since May 2014, the internal affairs ministry said.
But stripping out the impact of a sales tax rise last year, the inflation rate came in at a tepid 0.2 percent from a year ago, well short of the BoJ’s target of 2.0 percent inflation.
Analysts said the figures would do little to ease speculation that the central bank will have to launch further monetary easing measures this year to jack up prices and counter a downturn in the world’s number three economy.
Weighed by a plunge in oil rates and tepid consumer spending, Japanese inflation stalled in February for the first time in nearly two years.
Since Prime Minister Shinzo Abe took office in late 2012, Tokyo has launched a high-profile bid to kick-start the economy and end years of stagnant or falling prices.
The downtrend in prices has been blamed for holding back growth. Separate data Friday from the ministry showed spending among Japanese households dropped for the 12th month in a row.
Household expenditure fell 10.6 percent in March from a year earlier, worse than the 2.9 percent fall in February, partially reflecting robust spending a year earlier ahead of the April sales tax hike.
The unemployment rate edged down to 3.4 percent in March from 3.5 percent in February.