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Japan inflation quickens to over 5-year high, output gains

Published on Jan 31, 2014 8:29 AM
 
A customer looks at food products at a supermarket in Tokyo on Jan 30, 2014. Japan's core consumer prices rose 1.3 per cent in December from a year earlier, the fastest pace in more than five years, adding to evidence the economy is making steady progress towards ending 15 years of grinding deflation. -- PHOTO: REUTERS

TOKYO (REUTERS) - Japan's core consumer inflation rose at the fastest pace in more than five years in December and the job market improved, encouraging signs for the Bank of Japan as it seeks to vanquish deflation with aggressive money printing.

Factory output also grew in December and manufacturers expect to keep increasing production, although some analysts fret about the potential damage from the recent turmoil in emerging markets.

"The core consumer price index was stronger than expected, and durable goods prices seem to be rebounding. Consumer prices will likely continue its moderate growth," said Mr Junko Nishioka, chief economist at RBS Securities. "I think the BOJ is unlikely to adopt additional easing because there is no reason to justify it given the positive macro-economic environment."

Core consumer prices (CPI), which excludes fresh food but include energy costs, rose 1.3 per cent in December from a year ago, data showed on Friday, just above a median market forecast for a 1.2 per cent gain.

 
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