Japan consumer prices down in May for third straight month

Shoppers at the Shibuya district in Tokyo on June 2.
Shoppers at the Shibuya district in Tokyo on June 2.PHOTO: REUTERS

TOKYO (AFP) - Japan's core consumer prices fell for a third straight month in May, dealing a fresh blow to the country's faltering war on deflation, data showed on Friday (July 1).

The negative reading offered new evidence of the challenges faced by the government and the Bank of Japan (BoJ) in their bid to revitalise the world's number three economy.

The Internal Affairs Ministry announced early Friday morning that core consumer prices, which exclude volatile fresh food prices, dropped 0.4 per cent in May, on the heels of a similar decline the previous month.

The result matched the average 0.4 per cent drop expected by economists, according to the Nikkei business daily.

Prime Minister Shinzo Abe swept to power more than three years ago vowing to revive the country's fortunes with a mix of policies centred on central bank monetary easing, targeted government spending and deregulation.

But his attempts to power inflation have been hit by falling energy prices, coupled with recent robustness in the yen driving down the cost of imports.