TOKYO (AFP) - Japan's consumer prices rose in August, official data showed on Friday (Sept 29), but inflation was still way below the central bank's target, as authorities struggle to slay deflation in the world's third-biggest economy.
After stripping out volatile prices for fresh food, inflation was 0.7 per cent, according to the internal affairs ministry, the eighth straight month of price rises and in line with market expectations.
Excluding fresh food and energy, prices edged up just 0.2 per cent in August compared to the same month the previous year.
The figures are nowhere near the Bank of Japan's 2.0-per cent inflation target - seen as crucial in a long battle against deflation that is blamed for holding back the once-booming economy.
Japan's prospects have recently improved, however, with investments linked to the Tokyo 2020 Olympics giving the economy a shot in the arm.
On Friday, the ministry also said household spending in August edged up 0.6 per cent from a year earlier.
This was slightly lower than market expectations of a 0.9-per cent rise but the first gain in two months, the ministry said.
In an environment in which inflation is low or prices are falling, consumers tend to delay making purchases, pushing down household spending.
Meanwhile, the country's jobless rate stood at 2.8 per cent, a level unchanged since June.
And Japanese factory output was also in the black, gaining a better-than-expected 2.1 per cent in August.
The ministry held its view that manufacturing activity is on the path to recovery, saying it expected a decline in September and a rise in October but adding "on the whole production is picking up".
Japan's economy expanded by 0.6 per cent in the April-June period, notching up its sixth straight quarter of growth, the longest economic expansion in more than a decade.
While the labour market is tight and business confidence is high, wage hikes have been tepid and efforts to lift inflation have fallen flat despite years of aggressive monetary easing by Japan's central bank.