Japan's consumer prices increased by 0.9 percent in October from a year earlier, marking the fastest growth in five years, the Ministry of Internal Affairs and Communications said in a report on Friday.
According to the ministry, core consumer prices, which exclude volatile products, added 0.3 percent in the recording period, with the reading hitting the highest level since August 1998 in a sign that Japan may be lifting itself out of decades of deflation.
Japan's core consumer price index, excluding fresh foods, stood at 100.7 against the 2010 base of 100, in the recording period, marking the fifth straight month of increases, the ministry said, noting that energy prices accelerated 7 percent, comprised of a 7. 1 percent surge in gasoline prices and an 8.2 percent leap in electricity prices.
Economic and fiscal policy minister Akira Amari told a press briefing after the release of the statistics that Japan is now seeing the benefits of "Abenomics" and that further progress has been made to tackle deflation through the fiscal policies of Prime Minister Shinzo Abe, such as aggressive monetary easing and large amounts of fiscal spending.
But while some leading economists remarked that the latest data may signify that the effects of "Abenomics" may be kicking in and Japan might be on the verge of exiting its decades-old deflationary period, others maintained that reaching the central bank's inflation target of 2 percent in as many years, still remains an uphill challenge due to the CPI forecast expected to hover at around the 1 percent mark in the near future.
Additional data revealed that the core CPI for Tokyo's 23 wards in November, a key economic indicator for Japan's future price moves, increased 0.6 percent to 99.6, marking the seventh straight month of gains.
Despite the positive direction of prices in Japan, separate data also released Friday showed that the unemployment situation here remains stagnant.
The Ministry of Internal Affairs and Communications said that the unemployment rate in October was unchanged from the previous month at 4 percent, but noted that the availability of jobs had shown a preliminary uptick for the first time in two months.
According to the ministry, the number of those unemployed stood at 2.66 million in the recording period, rising 1.1 percent from a month earlier, on a seasonally adjusted basis. Those leaving their jobs of their own volition increased to 890,000 people, a rise of 3.5 percent the ministry said.
The job seeker to job availability ratio also showed signs of improvement, rising 0.98 percent in October from 0.95 percent a month earlier, the Health, Labor and Welfare Ministry said in a separate report, with the figures meaning that for every 100 people seeking work there were 98 positions available.
Analysts said that the seemingly stable job market had been helped by an increase in corporate profits and companies feeling they can broaden their recruiting parameters, but some economists noted that a planned sales tax hike to 8 percent from the current 5 percent next April could inhibit some companies from hiring more staff and likely lead to cutbacks.
To this end, Health, Labor and Welfare Minister Norihisa Tamura told a press briefing that the ministry was watching global economic events to see if a slowdown would affect the employment situation here, with a particular emphasis on emerging economies.
He added that additional stimulus measures may need to be implemented by the government to bolster the employment market, should it be dragged down by a global economic slowdown or the planned sales tax hike next spring.
Source: Xinhua
