Japanese consumer prices fell and retail sales dropped in August, the government said today.
Japan's core nationwide consumer price index (CPI) fell 0.1 per cent in August from a year earlier, the 47th straight month of decline. That was in line with economists' forecasts.
The index, which excludes volatile prices of fresh food, rose 0.1 per cent from July.
Some economists said the month-on-month rise and the slight annual decline suggested deflation was moderating, but others said special factors such as higher medical costs affected the index in August.
It would probably take longer for prices to show a convincing recovery, they said.
Stronger exports and capital spending boosted Japan's economy in the second quarter, helping it record an annualised growth rate of 3.9 per cent in the April-June quarter, beating the pace of expansion in the United States.
Retail sales data announced separately also showed Japan's economy was still fragile.
Nationwide retail sales fell for the 29th straight month in August, dropping 2 per cent from a year earlier, the Ministry of Economy, Trade and Industry said. Retail sales at large stores fell 3.4 per cent year-on-year on a same-store basis.
Deflation is blamed for weighing down corporate profits and worsening debt and is cited along with weak consumption as one of the key hurdles to a sustainable recovery in Japan.