Japan’s consumer prices slide, unemployment falls

TOKYO, August 27, 2010 (AFP) – Japan’s consumer prices continued to slide while the unemployment rate fell for the first time in six months in July, the mixed data Friday illustrating the fragility of the country’s recovery. Japan’s core consumer price index fell 1.1 percent in July from a year earlier, government data showed, marking the 17th straight month of decline and a continued deflationary spiral.

The core consumer price index, which excludes volatile fresh food items, was in line with market expectations, according to a Dow Jones Newswires poll of economists.

But the price data adds to doubts about Japan’s economic recovery, which is under extra pressure from the effects of a strong yen and global economic uncertainty.

“The data shows that the downward pressure on prices cannot be eradicated easily,” said Hideki Matsumura, economist at Japan Research Institute. “The effect of a high yen will start showing its real effect in a few months.”

The price data is a blow to the government’s stated goal of ending deflation in the fiscal year starting April 2011, as top officials pile pressure on the Bank of Japan to take more steps to support an economy threatened by a strong yen.

The central bank ha