Japan consumer prices rise in March for third straight month — Government
TOKYO: Japanese consumer prices rose in March, data showed yesterday, but a drop in factory output and still-weak household spending underscored the challenges facing policymakers as they battle on-and-off deflation.
The figures came a day after Japan’s central bank boosted its economic growth forecast, even as its chief admitted an inflation target – already running four years late – was likely to be delayed once again.
Consumer prices rose in March for the third straight month on the back of higher energy costs, data from the internal affairs ministry showed.
After stripping out the volatile cost of fresh food, nationwide consumer prices increased 0.2 per cent from a year earlier, matching analyst expectations.
That follows a 0.2 per cent rise in February and a gain of 0.1 per cent in January.
Separate data showed household spending fell 1.3 per cent in March from a year ago – the 13th consecutive monthly drop – and output at the nation’s factories shrank by 2.1 per cent.
While Japan’s job market is tight, individual spending – which accounts for more than half of the country’s GDP – has remained in the deep freeze.
Earl ier this month the International Monetary Fund raised its growth forecast for Japan’s economy this year and next, citing a pickup in exports, but warned that a shrinking labour force and below-forecast inflation would curb longer-term expansion.
And with cash-rich firms not splashing out on big pay rises, analysts are doubtful about a significant improvement in consumer spending anytime soon.
Prime Minister Shinzo Abe swept to power in late 2012 on a pledge to cement a lasting recovery through a growth plan dubbed Abenomics.
The scheme – a mix of aggressive monetary easing and huge government spending along with reforms to the economy – stoked a stock market rally as it weakened the yen and fattened corporate profits.
But its effect on the wider economy has been less dramat ic, with promised reforms slow in coming. — AFP