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Deflation nearing end, 2013 data show

Kyodo

Economic data for 2013 released Friday showed signs that Japan is moving a step closer to beating prolonged deflation, with consumer prices rising for the first time in five years while the employment situation also improved on the back of an economic recovery.

Core consumer prices excluding fresh foods rose 0.4 percent in 2013 from a year earlier for the first rise in five years, due mainly to a gain in energy prices stemming from the yen’s depreciation.

The core consumer price index, excluding fresh foods, stood at 100.1 against the 2010 base of 100, the Internal Affairs and Communications Ministry said. In December alone, the core CPI rose 1.3 percent from a year earlier to 100.6 for the seventh straight month of increase.

An increase in energy-related prices lifted overall consumer prices annually, with electricity prices increasing 7.1 percent and gasoline prices climbing 5.9 percent, due mainly to the effects of the weakening yen.

The employment situation also improved, as the jobless rate fell to an average of 4.0 percent in 2013 from the previous year’s 4.3 percent, marking a third straight year of decline, while job availability improved for the fourth straight year.

In December alone, the unemployment rate fell to a seasonally adjusted 3.7 percent from the previous month’s 4.0 percent, hitting its lowest level in six years with corporate earnings picking up on the back of the economic recovery, the government said.

The number of unemployed dropped 7.7 percent to 2.41 million, as people who were forced to quit jobs eased 11.5 percent to 100,000, the internal affairs ministry said in a preliminary report.

On the production front, industrial output grew 1.1 percent in December from the previous month for the first rise in two months, bolstered partly by production of industrial robots. For the 12 months through December, the index shed 0.8 percent from the previous year.

The positive moves came after the yen started to decline sharply at the end of 2012 with the launch of the government led by Prime Minister Shinzo Abe, who has promoted economic policies dubbed “Abenomics.”