Japan's core consumer prices rose 0.5 percent in July from a year earlier to mark a seventh straight gaining month, a sign the economy is making steady but painfully slow progress toward meeting the central bank's 2 percent inflation target. Ciara Lee reports.
On a spree - consumer prices in Japan rising for a seventh straight month. Up 0.5 percent in July from a year earlier. It's a sign the economy is making steady, although painfully slow progress toward meeting the central bank's 2 percent inflation target. The increase though came mostly from higher fuel bills Subdued wage growth discouraged consumers from increasing their spending And highlighting the challenge the Bank of Japan faces in achieving its ambitious price goal. (SOUNDBITE) (English) JASPER LAWLER, SENIOR MARKET ANALYST, LONDON CAPITAL GROUP, SAYING: "My worry is that over the longer term there's going to be some sort of pressure moment on the BoJ's ability to hold up on the 10 percent yield target. Because Japan, the way it's government bond market is moving is not just related to Japanese CPI and inflation, it's related to global inflation. And if global inflation starts picking up, yields across the globe are going to pick up and are going to make that target very difficult to maintain." Japan's economy expanded at the fastest pace in more than two years in the second quarter But price and wage growth remain stubbornly weak with firms still wary of passing on profits to employees, And raising doubts over whether the growth is sustainable. The BOJ has had to push back the timing for reaching its price target six times since it deployed a massive stimulus programme in 2013. It currently expects inflation to hit 2 percent in the fiscal year ending in March 2020.