Japan’s core consumer price index (CPI), which includes all items but not fresh food prices, declined 0.1 per cent in August from a year ago.
It is the first time in more than two years that core consumer prices in Japan have fallen, in spite of prime minister Shinzo Abe’s best efforts to stimulate the economy.
The headline CPI for Japan was up 0.2 per cent over the year, according to the official figures from Japan.
The data follows Mr Abe’s pledge to increase Japan’s GDP from approximately 500 trillion yen to 600 trillion yen, although he did not set a target date for the increased economic output.
Mr Abe called it the “second stage” of Abenomics and also stated he would boost the country’s fertility rate.
Angus Nicholson, market analyst at trading platform IG Group, said the “mixed” inflation data showed inflationary pressures are “beginning to rise”.
He added: “Whilst this is a positive, it is unlikely to stay the hand of the BOJ [Bank of Japan] and is more an indication that QQE is starting to work.
“With an increased program and a steadily improving global outlook, they could still achieve 2 per cent inflation at some point in 2016.”
