Japan consumer prices rise 3.4% on-year in May: govt

TOKYO (June 27): Japanese consumer inflation rose at the fastest pace in decades in May as a sales tax hike introduced to help reverse years of falling prices started to bite, official data showed Friday.

Japan's core consumer prices, stripping out volatile fresh food prices, rose 3.4 percent year-on-year in May, the internal affairs ministry said.

It was higher than a 3.2 percent increase in April and matched market expectations.

The May rise was the fastest increase since April 1982, according to official data, but the rise stemmed largely from a sales tax hike.

Japan raised its consumption tax rate to 8.0 percent from 5.0 percent on April 1 in the nation's first sales levy hike in 17 years.

Excluding the effect of the higher tax on prices, Japan's core consumer prices rose 1.4 percent in May, just below a 1.5-percent increase the previous month, but within the range expected by Bank of Japan governor Haruhiko Kuroda.

The central bank has targeted 2.0 percent inflation excluding the tax hike effect.

Shinzo Shinzo Abe's government has put conquering deflation and stoking growth in the world's third-largest economy at the top of its agenda with a policy blitz dubbed "Abenomics".

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