Tokyo - Japanese inflation in March picked up for the first time in 10 months, data showed Friday, offering a sliver of hope for Tokyo's war on deflation, but spending remained stubbornly weak.
Core inflation, excluding volatile fresh food prices, rose 2.2 percent year-on-year in March, logging the first increase since May 2014, the internal affairs ministry said.
However, stripping out the impact of a sales tax rise last year, the inflation rate was a tepid 0.2 percent from a year ago, well short of the central bank's 2.0 percent target.
Analysts say policymakers will almost certainly be forced to expand the BoJ's massive monetary easing scheme in a bid to jack up prices and counter a downturn in the world's number three economy.
Sustained inflation is a cornerstone of Prime Minister Shinzo Abe's drive to conquer stagnant or falling prices and revive growth.
"Inflation is still close to zero and could drop in the coming months... The reading was a little bit positive, but worries (for the BoJ) have not disappeared," said Takeshi Minami, chief economist at Norinchukin Research Institute.
The data published Friday -- including a nearly 11 percent drop in household spending -- come a day after the BoJ cut its growth and inflation forecasts.
Japan's gross domestic product will expand 2.0 percent in the year to March 2016, while the inflation rate is seen at 0.8 percent, the BoJ said in a semi-annual report.
That compares with a previous estimate of 2.1 percent and 1.0 percent respectively.
AFP
