Japanese inflation stayed at a decade high in August, official figures showed today, amid signs rising prices are becoming more widely entrenched in Asia's largest economy.
Core consumer prices rose 2.4% from a year earlier, up for the 11th month in a row, the government said.
Rising energy and material costs are starting to push up the cost of other goods and services, which analysts said could prompt consumers to tighten their purse strings as the economy skirts recession.
Japan's economy posted its sharpest contraction in nearly seven years last quarter. Consumer spending remains sluggish, while exports to the US and Western Europe are falling due to the worsening global economy.
Japan was trapped in a deflationary spiral for years but few are cheering the return of inflation because it is being driven by rising import costs rather than a stronger domestic economy.
Core inflation in Tokyo, a leading indicator released a month earlier than the figures for the whole of Japan, rose to 1.7% in September from 1.5% in August, the government reported.
Excluding food and energy, Tokyo prices rose 0.5%, suggesting that inflationary pressures are spreading to other goods and services.
Despite the resurgence of inflation, Japan's central bank is not expected to raise its super-low interest rates any time soon to try to contain price pressures, due to the weak state of the economy and current financial tumult.
The Bank of Japan has kept its benchmark lending rate at 0.5%, the lowest among the major economies, since February 2007. Analysts said a recent drop in the price of oil and other commodities should help rein in inflation in the months ahead.
