the republic logo

Japan inflation eases in June, highlighting impact of sales tax, challenge to central bank


TOKYO — Japan's inflation rate eased slightly in June as a sales tax hike stunted demand, the government reported Friday.

The core consumer price index, which does not include prices for fresh foods, rose 3.3 percent in June, down from the 3.4 percent in May, the report said. It was the 13th straight month of inflation, however, after years of sagging prices that sapped the vitality of the world's third largest economy.

Factoring out surging energy costs, such as a 10.6 percent rise in gas prices, the increase was 2.3 percent. Excluding the direct effect of the April 1 increase in the sales tax to 8 percent from 5 percent, the inflation rate was 1.3 percent, the Bank of Japan said.

The central bank has set a 2 percent inflation target, aiming to break Japan out of years of deflation, but forecasts that the rate will remain just above 1 percent for the foreseeable future.

The central bank and government are seeking to spur demand and corporate investment in hopes of restoring Japan to sustained growth. But the need to improve tattered public finances through tax hikes has complicated that strategy.

Think your friends should see this? Share it with them!

All comments are moderated before posting. Your email address must be verified with Disqus in order for your comment to appear.
View our commenting guidelines and FAQ's here.

Story copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Feedback, Corrections and Other Requests: AP welcomes feedback and comments from readers. Send an email to and it will be forwarded to the appropriate editor or reporter.

We also have more stories about:
(click the phrases to see a list)


Follow The Republic:

All content copyright ©2014 The Republic, a division of Home News Enterprises unless otherwise noted.
All rights reserved. Privacy policy.