New figures show that Japanese unemployment has risen unexpectedly, while consumer prices continued to slide. The data show that deflation and weak domestic demand continue to drag on a gradual recovery from deep recession.
Japan's core consumer price index, which excludes volatile fresh food prices, fell 1.5% in April from a year earlier, marking the 14th straight month of decline and bigger than the 1.2% annual drop in March.
Analysts attributed the drop to a once-off factor which saw the introduction of a government waiver on high school tuition fees, one of Prime Minister Yukio Hatoyama's election pledges to boost disposable consumer income. But the drop was slightly greater than market expectations.
Underlining the tentative nature of Japan's recovery, unemployment edged higher to 5.1% in April from 5% in March. Economists had expected the rate to stay at 5%.
The data showed that post-recession Japanese economic activity, from rising manufacturing to booming exports, has yet to filter through a broader economy burdened by weak domestic demand.
