Japan's core consumer prices rose 0.3 percent in April from a year earlier to mark a fourth straight month of increases. Could, though, these and other signals in the economy be a false dawn? David Pollard reports.
Japan's latest inflation numbers look better. April's 0.3 per cent rise in core CPI from a year earlier means four straight months of price increases. In Q1, the economy grew at its fastest pace in a year. Asked whether this is another sign of improvement, economists give a cautious nod. (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "Yes, there has been a apparent cyclical improvement. You mentioned the inflation data. Productivity has picked up a little bit as well ..." But much of the inflation rise is due to energy costs. And an ageing population and weak household spending continue to dog the recovery. Can then Japan be on the cusp of a new economic dawn? (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "The answer is no. There's no point in companies investing domestically because the demand isn't there. So Japan is hugely reliant on export markets for its products. That's evolving but it's not evolving very quickly. Japan is not out of the woods and may potentially suffer something of a pullback in to secular stagnation." And inflation, though rising, is still a long way distant from the Bank of Japan's two per cent target. The jury still far from convinced that years of heavy economic stimulus have had the desired effect.