2014.10.3101:35:29UTC+00Inflation for Japan at six month low

Japan’s inflation fell to its slowest pace in six months, further challenging Bank of Japan (BoJ) governor Haruhiko Kuroda to pull the third largest economy in the world back up.

According to the country’s statistics department, consumer prices with fresh food taken out rose by 3.0% in September compared to the previous month, meeting forecasts of economists surveyed by Bloomberg News. Excluding the effects of the a sales tax increase in April, however, the BoJs key gauge of core inflation, was up by only 1.0%.

The latest figures are seen to be a hit on Kuroda, who is targeting an inflation rate of 2% and who claimed earlier in July that core inflation will not fall below 1%.

Economist Naoki Iizuka from Tokyo’s Citigroup Inc, says that, “Inflation is going to slow down -- falling oil prices, a stalled economy and the fading impact of the weak yen all point to consumer prices dipping below 1 percent. Japan’s economy won’t collapse but today’s data suggest that a recovery will be lukewarm even from October to December.”

Kuroda admitted this month that falling oil prices will pull down inflation, but increase the purchasing power of consumers which will raise up the economy and long term inflation. According to data released today, however, spending of households dropped by 5.6% last month compared to the year before.