Inflation in Japan Slows due to Falling Oil Prices

A file photo from 16 January 2013 shows smoke coming out from a plant in Tokyo bay, Japan. Japan's industrial production rose a seasonally adjusted 4 per cent in January from the previous month for the second straight month of increase. EPA

TOKYO (DPA) – Consumer prices in Japan rose at a slower rate of 2.2 per cent in January from a year earlier due to tumbling oil prices, the government said Friday.

The rate dropped from the 2.5-per-cent rise in December and has slowed for the sixth consecutive month, the Ministry of Internal Affairs and Communications said.

The core consumer price index, which excludes fresh food, stood at 102.6 in January against a base of 100 for 2010, the ministry said.

Excluding the effect of a sales tax hike in April, the inflation rate would be 0.2 per cent in January – much lower than the 2-per-cent target set by the Bank of Japan in April 2013.

The bank has been aiming to lift the rate to 2 per cent in or around the next financial year starting April 2015.

The ministry also reported Friday that household spending dropped 5.1 per cent from a year earlier to 289,847 yen (2,436 dollars) in January for the 10th straight month of fall.

Prime Minister Shinzo Abe took office in December 2012 and vowed to overcome deflation that has plagued the world's third-largest economy for nearly two decades.

However, consumer spending remains sluggish especially after an increase in the sales tax to 8 per cent in April, from 5 per cent.

 

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