Japanese core inflation eased 0.1 percent on year in March, the Cabinet Office said on Friday, marking the first annual decline since September 2007. Analysts had been expecting a 0.2 percent decline following a flat performance in April.
Overall national inflation was down 0.3 percent on year, in line with forecasts following a 0.1 percent annual decline in February. CPI minus fresh food and energy also eased an annual 0.3 percent - slightly worse than predictions for a 0.2 percent decline after a 0.1 percent fall in the previous month.
Among the individual components, food was up an annual 2.2 percent, while housing eased 0.1 percent, fuel added 1.6 percent, furniture shed 0.6 percent, clothing lost 0.5 percent, medical care was up 0.1 percent, transportation fell 5.4 percent and education was up 0.8 percent.
Reacting to the data, Japan's Finance and Economy Minister Kaoru Yosano said that it was not yet appropriate to say that deflation had definitively returned.
It's too early to make a judgment based on the (data) alone that Japan has tilted greatly toward deflation, Yosano told reporters following a regularly scheduled cabinet meeting.
April core inflation in Tokyo - considered a leading indicator for the national trend - was flat versus forecasts for a 0.2 percent following the 0.4 percent gain a month earlier. Overall Tokyo inflation was down 0.2 percent, defying predictions for a 0.1 percent gain after the 0.2 percent increase in March. Inflation minus food and energy dropped 0.6 percent - more than predictions for a 0.5 percent decline after the 0.4 percent fall in the previous month.
Among the individual components, food gained an annual 0.4 percent, while housing was off 0.3 percent, fuel jumped 4.6 percent, furniture shed 2.1 percent, clothing lost 0.6 percent, medical care added 0.1 percent, transportation fell 0.9 percent and education was up 0.6 percent.
Also on Friday, the seasonally adjusted unemployment rate is Japan surged to 4.8 percent in March, the Ministry of Health, Labor and Welfare said on Friday. That was higher than analyst expectations for a 4.6 percent increase following the 4.4 percent gain in February. The job-to-applicant ratio fell to 0.52 - worse than expectations for a ratio of 0.55 after posting a 0.59 in February.
Also, all-household spending was down 0.4 percent on year, while wage-earner household spending was up 0.7 percent and the propensity to consume came in at 94.1 - up 3.7 points on year.
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