Consumer prices in Japan have reached a level not seen in over three decades, the Internal Affairs Ministry has reported. The government views this as good news because it further eases protracted deflation worries.
Inflation in the world's third-largest economy rose by 3.4 percent in May year-on-year, the Internal Affairs Ministry announced Friday. The figure represented the 12th straight month of rising consumer prices, which have been increasing faster than at any time in the last 32 years.
The government said the inflation rate for May was a signal Tokyo's bid to jumpstart the economy was taking hold, but warned it was too early for celebrations.
The Asian country had seen massive efforts by the government to leave the deflation spiral of falling consumer prices and constrained consumer spending that has crippled the national economy for many years on end.
Targeting national debt
The steep rise in inflation in May was largely driven by a consumption tax hike in the previous month that took the rate from 5 to 8 percent.
The tax rise was introduced with a view to shrink Japan's mammoth national debt without derailing a budding economic recovery by harming consumer spending.
The government said it hoped more companies would raise wages to attract skilled labor and leave employees with more money in their pockets to spend on goods and services. Official data released Friday showed the jobless rate in Japan edged down further to just 3.5 percent in May.
hg/cjc (Reuters, AFP, dpa)