New official data show that Japan's consumer prices fell for the ninth straight month in November, while household spending declined and unemployment ticked up.
According to Japan’s Internal Affairs Ministry, Japan's household spending declined 1.5 percent in November from a year ago. Meanwhile, unemployment rate edged up to 3.1 percent in November from the 3.0 percent registered in October.
Japan’s Central Bank said last month it expected to hit two percent inflation by March 2019 - four years later than its original target and the latest in a string of delays.
Media reports say, under deflation, general price falls can discourage companies from making capital investments, while also slowing production. Deflation can also discourage spending by consumers, who might postpone purchases until prices drop further or save money, creating further pressure on businesses.
The data are viewed as a further blow to the efforts from the government and the Bank of Japan to pump up the country’s economy with massive public spending and aggressive monetary easing.
Officials blame external factors including falling energy prices and uncertainty related to emerging economies, for their failure to achieve a promised two percent inflation target.
Economists expect inflation to accelerate in 2017 reflecting a recent rebound in oil costs and yen declines that push up import prices, easing pressure on the Bank of Japan to top up an already massive stimulus program.