No. 3 Japan
Japanese companies spent $65.2 billion in 2012 on business travel, representing a year-on-year decline of 1.2 percent. Reuters

Japan's core consumer inflation hit a five-year high, rising 0.8 percent in August from a year earlier, a good omen in the battle against deflation, the government announced Friday morning.

Much of the gain in August came from high energy prices and a weaker yen inflating the cost of imports, which could cause some concern about dampening household spending.

Still, the Bank of Japan has expressed confidence that prices will continue to rise and approach its 2 percent inflation target as robust personal spending allows more companies to pass rising costs on to consumers.

"Consumer spending has been strong, so firms feel more comfortable about raising prices," Shuji Tonouchi, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo, told Reuters. "The BOJ is likely to take these numbers positively, given that it wants to achieve 2 percent inflation in two years’ time."

The rise in core consumer prices, which includes oil products but excludes volatile prices of fresh food, was the third straight month of increase and slightly faster than a 0.7 percent rise in July, data from the Internal Affairs Ministry showed Friday.

It was the fastest gain since November 2008, when core consumer inflation hit 1 percent, reflecting a spike in global commodity prices.

A 13.2 percent rise in gasoline prices and an 8.9 percent increase in electricity bills were largely behind the increase in core consumer prices.

But prices of durable goods, which have continued to fall for years due to tough competition and weak demand, are falling at a slower pace or even turning up in a sign Japan may be nearing a sustained end to deflation.

The so-called core-core inflation index, which excludes food and energy prices and is similar to the core index used in the United States, fell 0.1 percent in August. That was the same pace of decline in July and smaller than a 0.2 percent fall in June.

The BOJ launched an intense burst of monetary stimulus in April.