Japan deflation persists, production falls

TOKYO - The Associated Press

Japan has said its core consumer price index fell 0.4 percent in April. AP photo

Japan’s core consumer price index fell 0.4 percent in April from a year earlier, while industrial production also weakened, the government reported yesterday.

The data offer scant evidence of a rebound, though officials say the economy is on the cusp of a recovery and should show stronger gains by midyear.

Industrial production fell 2.3 percent from a year earlier though it was up a seasonally adjusted 1.7 percent from the month before. The strongest gains were in autos and other transport equipment and in electronic components and devices, according to the Ministry of Economy, Industry and Trade.

Despite recent turmoil in financial markets, Prime Minister Shinzo Abe has vowed to persist in aggressive monetary easing and stimulus spending aimed at helping Japan break out of deflation, or falling prices, that has contributed to two decades of economic stagnation.

“No action, no growth,” he declared to a group of economic experts gathered this week in Tokyo to assess his “Abenomics” policies.

Abe characterized recent market gyrations as “routine financial phenomena.”

“We must not allow ourselves to be distracted and intimidated by the crisis conditions we face,” said economy minister Akira Amari.

Though the Nikkei remains around 30 percent higher for the year, boosted by optimism over the Bank of Japan’s unprecedented monetary easing, it’s down 13 percent from its peak on May 22, reflecting doubt over whether the government’s economic strategy can extricate the country from years of economic malaise.