Tokyo - Japan released a lacklustre string of economic data Friday including a slowing inflation rate that dealt another blow to Tokyo's bid to conquer years of falling prices and tepid growth.
The figures come after Prime Minister Shinzo Abe called a snap election and delayed a sales tax hike set for next year as an earlier levy hike helped push the world's number three economy into recession.
Japanese core consumer inflation came in at 2.9 percent in October from a year earlier, matching market forecasts but slowing from 3.0 percent in September.
Prices rose from a year ago largely because Tokyo raised sales tax from 5.0 percent to 8.0 percent on April 1, driving up the cost of goods which sparked a dive in spending.
Adjusted for the tax increase, the nationwide core consumer-price index rose 0.9 percent from a year earlier in October, after climbing 1.0 percent in the previous month, according to Dow Jones Newswires.
The figure is the lowest in a year, and comes as the Bank of Japan's ambitious 2.0 percent inflation target - which it initially aimed to hit in 2015 - looks increasingly out of reach.
Meanwhile, factory production in October edged up a better-than-expected 0.2 percent on-month, rising for the second straight month and beating market expectations of a 0.6 percent fall.
“It is a positive set of data that hints at hopes for future recovery in production,” SMBC Nikko Securities said in a note.
The unemployment rate slipped to 3.5 percent from 3.6 percent.
But “despite the tight labour market, inflation continues to moderate,” said Marcel Thieliant from Capital Economics.
“Price pressure should moderate further in the near-term, as the recent plunge in crude oil prices has yet to be reflected in the cost of energy imports,” he added.
And “business surveys point to stagnant industrial output at best”.
Spending data was mixed with retail sales up 1.4 percent in October, but household spending fell 4.0 percent on-year, marking the seventh consecutive month of decline.
Japan's economy shrank between July and September, the second consecutive quarterly contraction, in the wake of an April sales tax rise that was designed to help pay down one of the world's largest public debt mountains.
The levy hike delivered a body blow to Abe's efforts to rev up growth, just as the long-laggard economy appeared to be turning a corner.
The weaker-than-expected GDP figures convinced Abe to put off another sales tax hike, due in 2015, and call a snap election that he described as a referendum on his policies, dubbed “Abenomics” - although observers said it was a strategic move to fend off party rivals ahead of a leadership vote next year. - Sapa-AFP