adminTOKYO. – Japan’s consumer prices rose in July at their fastest pace for almost five years, data showed last week, giving cheer to the government’s easy-money policy but putting a strain workers owing to slow wage growth. The reading, which excludes volatile prices of fresh food, was up 0,7 percent from a year earlier, the biggest rise since a 1,0 percent increase in November 2008 when expensive energy imports temporarily offset domestic deflationary pressure.
It also follows June’s 0,4 percent increase, which marked the first rise in 14 months, according to the internal affairs ministry.
The ministry added that unemployment edged down to 3,8 percent in July – its lowest since October 2008 – from 3,9 percent in June.
Separately the economy and industry ministry said factory output rose 3,2 percent on month in July, reversing a revised fall of 3,1 percent in the previous month.
The latest numbers will provide a lift for Prime Minister Shinzo Abe, who has pledged to reverse 15 years of deflation with active spending, which he says will stoke growth.
The latest factory output numbers are “good if we consider exports, which weren’t that favourable during the month”, said Norinchukin Research Institute chief economist Takeshi Minami.
“It shows the economic recovery remains intact,” he told Dow Jones Newswires.
Mizuho Securities Research and Consulting senior economist Norio Miyagawa said higher prices are “further proof that the Japanese economy is solidly recovering. The next challenge is how soon it will start pushing up wages”. – AFP.
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