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Japan's household spending falls again

AAP logoAAP 27/12/2016

Japan's household spending declined 1.5 per cent year-on-year in November for the ninth month in a row amid stagnant wages, indicating the challenge Prime Minister Shinzo Abe's government faces in reinvigorating the economy.

Japan continues to struggle with stubborn deflation as separate government data showed that the country's consumer prices had dropped for the ninth straight month.

Consumer prices fell 0.4 per cent in November from a year earlier amid sluggish consumer spending and falling global energy prices, the Ministry of Internal Affairs and Communications said.

The reading was far off the two per cent inflation goal set by the Bank of Japan in April 2013, when it introduced aggressive monetary easing measures.

The core consumer price index, excluding fresh food, stood at 99.8 against a base of 100 for 2015, the ministry said.

Abe took office four years ago, vowing to pull the world's third-largest economy out of a deflationary spiral, but his government has so far failed to do so.

Abe told reporters on Monday that Japan's economy was "no longer in deflation," but Tuesday's government data showed otherwise.

In January, the central bank imposed negative interest rates to stimulate the world's third-largest economy and overcome deflation.

The ministry also reported Japan's unemployment rate climbed to 3.1 per cent in November from 3.0 per cent in the previous month for the first rise in three months.

Meanwhile, the availability of jobs, measured as the ratio of job offers per job seeker, edged up to 1.41 in November from 1.40 in the previous month, the Ministry of Health, Labour and Welfare said.

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