Japan economy weak but improved in April; deflation persists

TOKYO (AP) — Japan’s factory output fell 3.5 percent in April from the same month a year earlier, while consumer spending also edged lower, though both showed improvement from the month before, the government said Tuesday.

Earlier, the government reported that the consumer price index fell 0.3 percent in April for the second straight month of deflation. However, excluding both energy and volatile fresh foods, it rose 0.7 percent.

The world’s third-largest economy has been stuck in the doldrums despite massive monetary easing aimed at vanquishing deflation, which tends to discourage corporate investment and consumer spending.

Though the latest data present a mixed picture and are better than some economists’ forecasts, Prime Minister Shinzo Abe is seeking backing from his Liberal Democratic Party and its coalition partner, the Komeito, for a postponement of a sales tax hike due next year, out of concern the recovery is too weak to endure a fresh hit to consumer spending.

In April, consumer spending fell 0.4 percent in April from a year earlier, though incomes rose 0.7 percent. Unemployment was flat at 3.2 percent.

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