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Japan prices rise for ninth month ahead of tax increase | Japan prices rise for ninth month ahead of tax increase |
(about 5 hours later) | |
Consumer prices in Japan increased by 1.3% in February compared with the same period last year, marking the ninth month in a row of gains. | |
The figure met analysts' expectations, but is still well below Prime Minister Shinzo Abe's inflation target of 2%. | |
Japanese consumer spending also slowed, official data revealed, ahead of a planned tax increase in April. | Japanese consumer spending also slowed, official data revealed, ahead of a planned tax increase in April. |
A separate release revealed that Japan's jobless rate fell to 3.6% - the lowest rate in six years. | |
When the tax increase comes into effect next month, sales tax on everyday goods will increase from 5% to 8%. Mr Abe has argued the tax increase is necessary to cut Japan's rising public debt, as its population ages. | |
The increase in consumer prices could help Japan combat its common foe - deflation, or decreasing prices - but could also slow down economic activity. | The increase in consumer prices could help Japan combat its common foe - deflation, or decreasing prices - but could also slow down economic activity. |
The figures have fuelled speculation about whether or not the Bank of Japan will step in with further stimulus measures should the tax increase have an adverse impact. | The figures have fuelled speculation about whether or not the Bank of Japan will step in with further stimulus measures should the tax increase have an adverse impact. |
Already, analysts have been surprised by falling consumer spending - defying expectations that the planned tax increase would lead to a rush of shopping before its implementation. | |
Official figures also showed that household spending posted a surprise decline of 2.5% in February. | Official figures also showed that household spending posted a surprise decline of 2.5% in February. |
Retail sales in Japan increased by 3.6% in February, which is slower than the 4.4% growth in January. | Retail sales in Japan increased by 3.6% in February, which is slower than the 4.4% growth in January. |
However, some analysts blamed the decline on harsh weather over much of the country during the month. | However, some analysts blamed the decline on harsh weather over much of the country during the month. |
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