Consumer prices in
Japan rose at the fastest pace in nearly five years in July, as policymakers'
attempts to end deflation appeared to pay off.
Consumer prices,
excluding food, rose by 0.7% from a year earlier.
However, the
faster inflation was mainly stoked by the rising cost of fuel imports due to a
weak yen, rather than by an increase in domestic demand.
Japan has been
trying to end years of deflation, or falling prices, seen as a major drag on
its economic growth.
While falling
prices may sound good, they hurt the economy as consumers and businesses tend
to put off purchases in the hope of getting a cheaper deal later on.
Stagnant wages and
revenues also make it harder for borrowers to pay off their debts
Policymakers have
unveiled a series of measures in recent months to try reversing the trend of
falling prices - something that Japan has been grappling with for the best part
of the past two decades.
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