Japan’s household spending, wages and job openings increased, while consumer prices tumbled for a 13th straight month, signaling a sustained recovery that’s still not strong enough to end deflation.
Wages advanced 0.8 percent, the first increase in 22 months, the Labor Ministry said.
Finance Minister Naoto Kan said today that the central bank may forecast deflation will end next fiscal year by predicting consumer prices will either increase or be unchanged. Currently the board sees a 0.2 percent decline for the year ending March 2012 and a 0.5 percent drop in the current year.
Kan last week last week called for price gains of as much as 2 percent. The ruling Democratic Party of Japan this month said it may include an inflation target in its platform for a July upper house election.
The BOJ will face “mounting pressure as the election approaches,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “For politicians, it’s easy to blame the central bank for lingering deflation and stagnant economic growth, and by doing that they can show the public they’re taking some action.”