USD/JPY Falls after Japan Deflation Continues and Industrial Output Drops

Japan’s core consumer price index fell 0.4 percent in April from a year earlier, while industrial production also weakened, the government reported Friday.

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 midyear.

Industrial production fell 2.3 percent from a year earlier though it was up a seasonally adjusted 1.7 percent from the month before. The strongest gains were in autos 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.

“No action, no growth,” he declared to a group of economic experts gathered this week in Tokyo to assess his “Abenomics” policies.

Japan’s benchmark Nikkei 225 stock index was trading 2.1 percent higher early Friday after tumbling 5.2 percent the day before, as investors responded to retreats in other major markets.

Abe characterized recent market gyrations as “routine financial phenomena.”

via Mainichi

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