Oct 30, 10:32 PM EDT

Japan's inflation slips as jobless rate edges up


AP Photo
AP Photo/Koji Sasahara
World Video

Multimedia
Archery on horseback still draws crowd
Ainu Rebels reclaim cultural pride
Japanese defend whaling tradition
Japan deals with 'Minimata Disease'
Latest News
Japan's inflation slips as jobless rate edges up

Japan's recovering crown princess attends banquet

Japan, North Korea in 2nd day of abduction talks

Chinese VP meets with Japanese governor delegation

Agenda of Japan's Abe challenged as scandals mount

Buy AP Photo Reprints
Multimedia
A district summary of the Beige Book
Measuring economic stress by county nationwide
Mall malaise: shoppers browse, but don't buy
Unemployment by the numbers
Family struggles with father's unemployment
Saying an affordable goodbye
Hard times hit small car dealer
Latest Economic News
Japan's inflation slips as jobless rate edges up

Puerto Rico government looks to raise tax on oil

Strengthening US growth reflects help from Fed

Yellen: Awareness of economists' diversity needed

German unemployment dips again in October

Spanish economy grows for 5th quarter in a row

Syria's 3 1/2-year conflict roiling the economy

Greeks get 8 years to clear austerity tax bill

UK rejects 'appalling' EU demand for more money

British economy grows 0.7 percent

Interactives
Greece's Debt Threatens to Spread
State budget
gaps map
Auto industry problems trickle down, punish Tennessee county
Women give old Derby hats a makeover in tough economy
S.C. town deals with highest unemployment in South
How mortgages were bundled and sold as securities
Tracking the $700 billion financial bailout
Tracking the year's job losses
State-by-state foreclosures since 2007
Credit crisis explained
Presidents and their economic legacies
Lexicon of the financial crisis
Americans' addiction to debt
Related Stories
GOP gleeful over Democrats' midterm woes in Ohio

TOKYO (AP) -- Japan's economic recovery remained in the doldrums in September, as household spending fell, inflation edged lower and unemployment ticked up.

The data were released Friday as the Bank of Japan held a monetary policy meeting. As the U.S. winds down its own "quantitative easing," Japan's central bank faces pressure to increase stimulus to support growth as Prime Minister Shinzo Abe weighs approval of a sales tax hike next year.

Core inflation, excluding volatile food prices, was at 3.0 percent, down from 3.1 percent in August. Unemployment rose to 3.6 percent from 3.5 percent.

The government reported that household spending fell 5.6 percent from a year earlier in September, though it rose 1.5 percent from August. Household incomes, meanwhile, fell by 6 percent from a year earlier in real terms, excluding inflation.

Abe and the central bank have sought to spur inflation as a way of encouraging consumers and businesses to spend more and thus support faster growth.

But a sales tax hike in April, from 5 percent to 8 percent, slowed the recovery that began in late 2012.

When the increased costs from the tax hike are figured in, inflation remains below the target rate of 2 percent. For Japan, which relies heavily on imports of crude oil and natural gas, a moderation in oil prices has helped reduce some price pressure. But the data released Friday showed inflation, excluding both food and energy prices, has remained flat at 2.3 percent since June.

Abe is due to decide before year-end on whether to raise the sales tax another 2 percentage points to 10 percent next year. The tax increases are needed to help counter Japan's huge public debt, but the hike is opposed by a majority of the public.

BOJ Gov. Haruhiko Kuroda has insisted that the central bank's massive asset purchases are having their intended effect. But he may be getting closer to conceding that the policy has not generated as much inflation as intended.

"So now the question is a pivotal one. Will the central bank then necessarily step on the pedal to hit the elusive `2' or will it replace the 2 percent inflation target with less lofty goals?" Mizuho Bank said in a research note.

"It takes two to tango," it said, forecasting that the central bank will likely hold off on further stimulus, while watching to see if Abe pushes ahead with the tax hike.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.