TOKYO Japan's core consumer prices edged up in November from a year earlier after three straight months of declines, data showed on Friday, as broadening price increases for food and grocery items offset some of the pressure from slumping energy costs.
But household spending suffered its third straight month of annual declines, casting doubt on the Bank of Japan's argument that robust consumption will allow firms to keep raising prices and help accelerate inflation to its ambitious 2 percent target.
The core consumer price index (CPI), which includes oil products but excludes volatile fresh food prices, rose 0.1 percent in November from a year earlier, after a 0.1 percent drop in October, data from the Internal Affairs Ministry showed.
That compared with a median market forecast for a flat reading.
Household spending fell 2.9 percent, more than a median market forecast for a 2.4 percent decline, underscoring the fragile state of the economy which narrowly dodged recession in the July-September quarter.
Wary of soft growth, the government plans nearly $800 billion in record spending in next fiscal year's budget.
The Bank of Japan also fine-tuned its massive stimulus programme last week to ensure it can keep up or even accelerate its money-printing to achieve its ambitious 2 percent inflation target.
The job market remained tight. The unemployment rate stood at 3.3 percent in November, up from 3.1 percent in the previous month but still around levels the BOJ considers near full employment.
Policymakers are hoping that the tightening job market will gradually nudge firms into accelerating wage hikes and underpin household spending. But repeated calls from premier Shinzo Abe to boost wages have so far fallen on deaf ears.
The BOJ, which sees wage hikes as key to achieving its inflation target, will conduct a nationwide poll on corporate wage plans that will be released on Jan. 18.- Reuters
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