Japan's core consumer price index fell 0.4% in April from a year earlier, while industrial production also weakened, the government said today.

The data offer scant evidence of a rebound, though officials say the economy is on the cusp of a recovery and should show stronger gains by the middle of the year.

Industrial production fell 2.3% from a year earlier though it was up a seasonally adjusted 1.7% from the month before.

The strongest gains were in cars and other transport equipment and in electronic components and devices, according to the Ministry of Economy, Industry and Trade.

Despite recent turmoil in financial markets, Prime Minister Shinzo Abe has vowed to persist in aggressive monetary easing and stimulus spending aimed at helping Japan break out of deflation, or falling prices, that has contributed to two decades of economic stagnation.

Abe characterised recent market gyrations as "routine financial phenomena." "We must not allow ourselves to be distracted and intimidated by the crisis conditions we face," said economy minister Akira Amari.

Though the Nikkei remains around 30% higher for the year, boosted by optimism over the Bank of Japan's unprecedented monetary easing, it is down 13% from its peak on May 22, reflecting doubt over whether the government's economic strategy can extricate the country from years of economic malaise.

The prospect of more yen in circulation, which is intended to boost inflation, has weighed on the currency. The yen has fallen sharply to the relief of the country's exporters and that weakening is pushing up prices, in yen terms, for imported crude oil and other commodities.

That is expected to help the central bank eventually reach its target of 2% inflation within the next two years.

But apart from a 4.2% increase in utilities costs, many other prices remained lower in April, the Management and Coordination Agency reported. It said the overall CPI, including food and energy prices, fell 0.7% from a year earlier as costs for vegetables, education and entertainment, fell, but rose 0.3% from the month before.

Core inflation, excluding food prices, also rose 0.3% from a year earlier. Japan's unemployment rate remained flat, at 4.1%, despite the government's insistence that Abe's policies are improving labour and wage conditions.

Without a strong improvement in incomes, which have been declining, any recovery in the consumer spending needed to help boost demand and sustain the recovery will be short-lived, economists say.