TOKYO: Japan’s consumer prices rose for the 10th straight month in October, government data showed Friday, but inflation was still far from the target seen as crucial to revive the world’s third-largest economy.
The core inflation rate was 0.8 percent year-on-year in October, according to data published by the internal affairs ministry, far below the two-percent target set by the Bank of Japan (BoJ).
When the volatile prices for fresh food and energy were stripped out, prices rose by even less—0.2 percent, the ministry said.
Japan’s economy has battled deflation for many years and the BoJ’s ultra-loose monetary policy appears to be having limited impact.
Other data showed that October household spending—seen as key for exiting deflation—remained flat compared to the same month a year earlier.
However, this was better than the 0.3-percent drop market analysts were expecting.
Household spending had fallen by 0.3 percent in September after rising by 0.6 percent in August.
The unemployment rate remained unchanged at 2.8 percent for the fifth consecutive month, also in line with market expectations, the ministry said.
Japan has notched up seven straight quarters of economic growth—the longest positive run for 16 years—with the upcoming 2020 Olympic Games giving the economy a shot in the arm.
However, consumer spending has remained weak and deflation continues to stalk the economy.
Japan’s weak inflation stands in sharp contrast to other major economies whose central bankers are looking to wind up their easing policies.
The US Federal Reserve is widely expected to hike rates for the third time this year in December and US policymakers have forecast another three rate hikes in 2018.
Meanwhile, the European Central Bank has announced it would halve its massive bond purchases from January as the eurozone recovery gathers pace, allowing the Frankfurt institution to begin winding down its crisis-era stimulus measures.