Japan core inflation falls back to zero year-on-year in February

[TOKYO] Japanese inflation returned to zero for the first time in nearly two years in February as it slowed for a seventh straight month on lower oil prices and lacklustre consumer spending, data showed Friday.

Core consumer inflation, excluding volatile fresh food prices, rose 2.0 per cent year-on-year in February due largely to a sales tax hike in April 2014, the internal affairs ministry said.

Adjusted for the tax increase, the nationwide core consumer-price index was flat from a year earlier, falling to zero growth for the first time since May 2013.

The reading is far short of the Bank of Japan's goal of 2.0 per cent inflation.

Inflation is a key measure for Tokyo's bid to end years of stagnant or falling prices that have been blamed for holding back growth and denting firms' expansion plans.

Prices had been on the rise, largely due to Japan's heavy post-Fukushima energy bills, but oil prices have tumbled since mid-2014 and consumers snapped their wallets shut after the government raised sales taxes to 8.0 per cent from 5.0 per cent last year.

Separate data from the ministry showed the nation's jobless rate edged down to 3.5 per cent in February from 3.6 per cent in January.

AFP