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Japan inflation, household spending slow in July, incomes up

In this June 26, 2015 photo, a man shops at a supermarket in Tokyo. Japan's inflation rate and household spending slowed in July, according to data released Friday, Aug. 28, 2015 that will likely raise pressure on the central bank to up its barrage of monetary stimulus. (AP Photo/Koji Sasahara)
In this June 26, 2015 photo, a man shops at a supermarket in Tokyo. Japan's inflation rate and household spending slowed in July, according to data released Friday, Aug. 28, 2015 that will likely raise pressure on the central bank to up its barrage of monetary stimulus. (AP Photo/Koji Sasahara) In this June 26, 2015 photo, a man shops at a supermarket in Tokyo. Japan's inflation rate and household spending slowed in July, according to data released Friday, Aug. 28, 2015 that will likely raise pressure on the central bank to up its barrage of monetary stimulus. (AP Photo/Koji Sasahara)

By Associated Press 2 min read

TOKYO (AP) – Japan’s inflation rate and household spending slowed in July, according to data released Friday that will likely raise pressure on the central bank to up its barrage of monetary stimulus.

The inflation rate in July was 0.2 percent, compared with 0.4 percent in June. Core inflation excluding volatile food prices was flat.

Price increases have moderated with the fall in oil prices, but that effect is thought to have peaked this summer. Still, inflation is still far from the official target of 2 percent set by the central bank and government.

Japan’s economy contracted 1.6 percent in April-June, but many economists are forecasting a renewed expansion in the current quarter.

The Bank of Japan is spending trillions of yen (billions of dollars) a month on asset purchases intended to push inflation higher and end years of deflation, or chronic price decreases.