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Japan spending slips in December

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Japan's household spending slipped 0.1 per cent in December from a year earlier, according to government data released Tuesday, suggesting demand remains sluggish in the world's third-largest economy.

[TOKYO] Japan's household spending slipped 0.1 per cent in December from a year earlier, according to government data released Tuesday, suggesting demand remains sluggish in the world's third-largest economy.

The figure, released by the internal affairs ministry, was weaker than market expectations of a 1.5 per cent rise, but a separate set of jobs data showed a mixed picture.

The jobless rate edged up 2.8 per cent in December from 2.7 per cent the previous month. But the ratio of jobs available compared to those looking for jobs improved to 1.59 - the highest level since January 1974, according to the labour ministry.

The latest data come as Japan has notched up seven straight quarters of economic growth - the longest positive run for 16 years - with the upcoming 2020 Olympic Games giving the economy a shot in the arm.

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But it has struggled to oust fears of deflation, failing to achieve the 2 per cent inflation rate target set by the central bank, which is thought crucial to boosting the economy.

The government and central bank hope to see a "virtuous cycle", with an export-led recovery having a positive impact on jobs and household income and thereby boosting domestic demand, which accounts for roughly 60 per cent of Japan's economy.

AFP

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