Japan's consumer prices rose 0.4% in 2013 from a year earlier for the
first increase in 5 years, due mainly to a rise in energy prices, the
government said Friday, signalling that the aggressive monetary policies of the
Bank of Japan to
beat prolonged deflation, are providing some evidence of positive results. There
was also positive news on jobs and industrial production.
The closely tracked core consumer price index, which
excludes volatile fresh-food costs, climbed 1.3% in December from a year earlier
- - in the seventh straight month of rises. For all of 2013, the index was up
0.4%, the first annual rise in five years.
The Bank of Japan has targeted a 2.0% inflation rate
as the level required to overcome deflationary pressures.
The employment situation also improved, as the nation's jobless rate
dropped to an
average 4.0% in 2013 from the previous year's 4.3%, marking a
third straight year of decline, while the country's job availability improved
for the fourth straight year.
The ratio of available jobs to applicants also rose
to 1.03, meaning 103 jobs were on offer for every 100 job seekers. That's the
first time that there has been a surplus of available jobs since October of
The official unemployment rate
understates the true jobless situation.
Data on Japan's industrial production shows
an expansion of 1.1% 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% from the previous year.
Meanwhile, manufacturing PMI data for
January, shows that business conditions at Japanese manufacturers improved at
the sharpest pace in nearly eight years in January. Record highs in the
growth of production and quantity of purchases reflected the sharp expansions
seen in new orders over the past few months.
The headline seasonally adjusted Markit/JMMA purchasing
managers’ index (PMI) - - a composite indicator designed to provide a
single-figure snapshot of the performance of the manufacturing economy - -
posted at 56.6 in January, up from 55.2 in December. This was the highest
reading posted by the PMI since February 2006, signalling a sharp improvement in
operating conditions in the Japanese manufacturing sector.
Markit says output expanded at the sharpest pace in
over 12 years of data collection in January, building on the sharp
expansions registered in the final quarter of 2013. This was the eleventh
successive month of expansion in production. Some respondents attributed the
latest increase to fuller order books, in turn a result of demand being brought
forward ahead of April’s sales tax rise.
New orders at Japanese manufacturers also rose for the
eleventh consecutive month in January and at the sharpest pace since February
2006. In contrast, the latest data indicated that the recent growth momentum
registered in new export orders was lost in January, as the pace of expansion
eased to the weakest in the current five-month sequence of growth.
Quantity of purchases expanded for the eleventh successive
month in January, and at a record pace. Anecdotal evidence suggested that
increased volumes of orders had contributed to the latest rise in purchasing
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