Consumer prices in Japan climbed 0.4 per cent in 2013 for the first full-year, an increase in five years amid aggressive monetary easing, the government said on Friday.
The core consumer price index of inflation, which excludes fresh food, stood at 100.1 last year against a base of 100 for 2010, the Ministry of Internal Affairs and Communications said.
The government and the Bank of Japan vowed to pull the world’s third-largest economy out of 15 years of deflation. In April, the central bank decided to take aggressive monetary easing measures to achieve an inflation target of 2 per cent within about 2 years.
Economic and Revitalisation Minister Akira Amari told a news conference that the economy is “proceeding smoothly” toward achieving the target.
But he added that wage hikes would be important for future economic growth.
“A virtuous cycle will be realised when wages are increased to a level sufficient to absorb price rises,” the minister said.
“The economy is expected basically to continue recovering,” Yuichiro Nagai, an economist at Barclays Securities Japan Ltd, was quoted by the Kyodo News agency as saying.
Nagai expected the economy to face negative growth for the April-to-June quarter due to the impact of a consumption tax increase in April. However, it is likely to return to positive growth in the next three months, he said.
In December, the index climbed 1.3 per cent from a year earlier, for the seventh straight month of increase, the ministry said.
Higher electricity costs and gasoline prices amid the fall in the value of the yen were behind the figures, the report showed.
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