Japan Says CPI Falls 0.3% In 2016, First Fall In 4 Years

TOKYO, (UrduPoint / Pakistan Point News - 27th Jan, 2017 ) - Japan's consumer price index dropped 0.3 percent in 2016, the first annual fall in four years, government data showed Friday, in another setback for Tokyo's efforts to counter deflation.

Japan has been struggling to reverse a years-long deflationary spiral of falling prices and lacklustre economic growth. Core consumer prices, which exclude volatile fresh food, declined 0.2 percent in December from a year ago -- slightly better than expectations of a 0.3 percent decline -- as weak household spending and meagre wage hikes keep a lid on inflation, the figures showed.

The monthly data -- which marked the 10th straight month of price declines -- are a blow to efforts of the government and Bank of Japan to pump up the economy with massive public spending and aggressive monetary easing.

Falling prices discourage companies from making capital investments, while also slowing production. Deflation can also discourage spending by consumers, who might postpone purchases until prices drop further or save money, creating further pressure on businesses.