Core consumer inflation in Japan slowed for a fourth consecutive month in November mainly because of plunging oil prices, according to official data released on Friday.
The core consumer price index (CPI), which excludes volatile fresh food, slowed to 2.7 percent in November from 2.9 percent in October.
Prices rose from year-earlier levels mainly due to the sales tax hike in April, which increased the tax rate from 5.0 percent to 8.0 percent – driving up retail prices.
Adjusted for the tax increase in April, the Japanese core consumer-price index rose 0.7 percent from a year earlier in November – the lowest level since September 2013.
The results are far short of the government and central bank’s aim to make a clear break from deflation and achieve its 2 percent inflation target.
Separate data revealed that household spending is weak and factory output is down, an indication that a rebound from the current recession will be mild.
Industrial output dropped 0.6 percent in November – the first drop in three months. According to Reuters the median estimate called for a 0.8 percent increase.
However, a government survey revealed that manufacturers expect output to surge 3.2 percent in December and 5.7 percent in January.
Slow wage growth has not helped increase household spending. Household spending dropped 2.5 percent in the year to November, lower than the market forecast of a 3.8 percent drop.
