Japan's consumer prices up first time in 14 months

July 26, 2013 at 5:55 AM
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TOKYO, July 26 (UPI) -- Japan's consumer prices in June rose 0.4 percent year-on-year, official data showed Friday -- a positive development in its fight to end 15 years of deflation.

June's core price index increase, announced by the Ministry of Internal Affairs and Communications on its website, includes all items except fresh foods. The ministry's table showed the CPI in May was unchanged from the same month of last year.

It was the first time in 14 months that consumer prices rose and the largest increase since November 2008.

The government of Prime Minister Shinzo Abe has introduced a number of stimulus measures to pull the country's economy out of chronic deflation. The measures have helped weaken the yen against major currencies, thus boosting Japanese critical exports.

As part of the stimulus effort, the Bank of Japan doubled its inflation target to 2 percent to be achieved in the next two years, with plans to inject billions of yen into the economy, officials said.

"The factor that pushed the CPI into positive territory was the rising of prices in energy fields, including higher heating oil and gasoline prices," Masahiko Hashimoto, an economist at the Daiwa Institute of Research, told Kyodo News. "As the size of price falls in durable goods is also becoming smaller, overall prices have begun to stop falling."

Kyodo quoted Chief Cabinet Secretary Yoshihide Suga as saying that deflationary pressure in the country "has started easing" but the government would continue to monitor price developments.

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