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Japan's Nov. consumer prices rise for 1st time in 5 months, household spending drops

Xinhua, December 25, 2015 Adjust font size:

Consumer prices in Japan rose 0.1 percent in November from a year earlier, marking the first increase in five months, the Ministry of Internal Affairs and Communications said in a report on Friday.

According to the ministry, the slight rise was attributable to a minor drop in energy prices, including those for crude oil, and an uptick in the cost of food.

Excluding prices for volatile fresh food, the core consumer price index stood at 103.4 against the 2010 base of 100, the ministry said.

Energy prices in the recording period declined 11.1 percent in November, compared to an 11.8 percent decline logged a month earlier, while prices for gasoline dropped 17.5 percent and electricity prices retreated 5.6 percent.

The report also showed that food prices were up 2.3 percent as were prices for durable goods for recreation, which jumped 14 percent.

The CPI, excluding food and energy prices, rose 0.9 percent in November, compared to a 0.7 percent increase booked a month earlier, the ministry said.

Often seen as an indicator for price moves in the coming months, the core CPI for Tokyo's 23 wards rose 0.1 percent in December on year to 101.9. This marks the first rise in prices in the metropolis in six months.

Overall, the latest consumer prices will do little to bolster the seemingly perpetually optimistic mood of the Bank of Japan (BOJ), who has set a lofty inflation target of 2 percent in two years. Despite prices remaining largely flat, Japan's central bank has said it expects to achieve its inflation target in the second half of fiscal 2016.

Separately, the government also said Friday that average monthly household spending in November dropped an inflation-adjusted 2.9 percent from a year earlier to 273,268 yen (2,273 U.S. dollars), in another blow to the BOJ, who needs businesses and consumers to spend more to help its aggressive reflation initiative.

"Some weakness is seen in household spending," was the ministry's official assessment, also noting that the income of salaried households had dropped a real 1.8 percent to 425,692 yen, marking the the third straight monthly decline.

Economists, the government and the BOJ all view household spending as a key economic indicator of broader private consumption, which accounts for 60 percent of Japan's economy. Enditem