Japan Inflation Rises However Below BOJ Target

Inflation in Japan rose for the first time in almost a year in March, offering hope of a rebound in price growth, although it remains far below the Bank of Japan’s 2% target, government data showed Friday.

The figures showing 0.2% growth in the core consumer price index come a day after the central bank left its monetary policy unchanged, sticking to the view that it has done enough to generate stable inflation albeit in a slower time frame than originally set out two years ago.  Sparking inflation is a key part of Prime Minister Shinzo Abe’s strategy to revitalize the Japanese economy by getting companies and consumers to spend more of their cash.

Other data released Friday also offered modest signs of encouragement for Japan’s economy, with a further tightening of Japan’s labor market potentially adding upward pressure on prices and a smaller-than-expected drop in household spending suggesting domestic consumption may not be as weak as feared.