The nation's core consumer prices rose at a slower than expected pace in March and household spending fell more than estimated — worrying signs for the central bank that domestic demand won't be strong enough to generate sustained inflation.
Industrial product in March also fell more than predicted, but economists remain optimistic that output will quickly recover in the following month as strength in overseas economies increases export demand.
Stripping away energy costs, consumer prices actually fell for the first time in almost four years, suggesting the Bank of Japan won't exit its radical quantitative easing program in the near future.