Japanâ€™s consumer prices unexpectedly fell and retail sales missed analystsâ€™ forecasts, adding to evidence that the economyâ€™s expansion is faltering as gains in the yen and austerity measures in Europe hit exports.
Consumer prices excluding fresh food fell 0.2 percent in June from a year earlier, the statistics bureau said in Tokyo today. The median estimate in a Bloomberg News survey was for no change in prices. Retail sales rose 0.2 percent, a separate report showed, the smallest gain since November and less than a median forecast for a 1.1 percent increase.
Enlarge image Japan Consumer Prices Fall 0.2% in Sign of Deflation Struggle
A slowing global economy is clouding Japanâ€™s growth prospects by weakening overseas demand for goods from cars to televisions just as a strengthening yen reduces profits. Photographer: Kiyoshi Ota/Bloomberg
Japan is relying on domestic spending to support growth as global demand weakens and the boost from earthquake reconstruction work lessens. Finance Minister Jun Azumi says the government will weigh the need for fiscal stimulus after gross domestic product figures due Aug. 13, while former Ministry of Finance official Takatoshi Ito is calling for the central bank to buy euro bonds to weaken the yen.
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