Japan inflation up 0.6% in April

Japan’s consumer prices have risen by 0.6% in April, from a year earlier, according to the statistics bureau.

It is the first sign of inflation in Japan in more than two years, as the country imports large amounts of fuel after twin natural disasters.

The rise in the core consumer price index, which excludes food prices, was largely in line with expectations.

Including food, consumer prices rose by 0.3% in April, compared with a year earlier.

Japan has been battling deflation, or falling prices, for more than a decade.

While potentially positive for bargain-hungry shoppers, deflation actually leads to companies and most consumers putting off purchases, in hopes that prices will continue to fall.

The April data is unlikely to reverse that trend, because the gains come largely from higher fuel prices.

The 11 March earthquake and tsunami left more than 24,000 people dead or missing.

It also destroyed some of Japan’s ability to generate electricity.

The country has been importing large amounts of fuel in order to make up the difference.

“The commodities and crude oil prices are pushing the inflation figures up,” said Credit Suisse chief economist Hiromichi Shirakawa.

“Although I expect consumer spending will recover in May and the months ahead in the wake of the disaster, wages and salaries haven’t risen.”

He added: “I’m concerned about consumer spending towards the summer”.

Japan’s economy, the world’s third largest, has slid back into recession after the devastation caused by the earthquake and tsunami.

Gross domestic product shrank 0.9% in the first three months of the year.

Japan’s economy has now contracted for two quarters in a row, the generally accepted definition of a recession.

This article is from the BBC News website. © British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.