TOKYO, June 30 (APP/AFP) – Japan’s consumer prices rose
for the fifth straight month in May, government data showed Friday, but weak household spending underlined the challenges facing Tokyo’s fight to rid the world’s number three economy of deflation.
The country’s prospects have been improving on the back of strong
exports, with investments linked to the Tokyo 2020 Olympics also giving the economy a shot in the arm. The labour market is tight and business confidence is strong.
But consumer spending remains tepid and the Bank of Japan has
struggled to lift inflation despite years of aggressive monetary easing.
After stripping out the volatile cost of fresh food, the inflation
rate came in at 0.4 percent, the fifth consecutive monthly rise following a 0.3 percent increase in April and a 0.2 percent gain in both March and February, according to the internal affairs ministry.
But Friday’s figures are still way off the Bank of Japan’s 2.0
percent inflation target — seen as crucial to conquering Japan’s long struggle to slay deflation, blamed for holding back the once-booming economy.
Separate data showed household spending fell 0.1 percent in May from
a year ago, extending its declining streak of more than a year.
Japan has been struggling to defeat years of deflation and slow
growth that followed the collapse of an equity and property market bubble in the early nineties.
Falling prices can discourage spending by consumers, who might
postpone purchases until prices drop more or look to save money instead.
That puts pressure on businesses, creating a cycle in which firms
then cut back on expanding production, hiring new workers or boosting wages.
International News
Japan inflation ticks up again, but spending remains weak
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