Japan's core inflation rises for 1st time since December 2015

Government data showed Friday that Japanese consumer prices halted a long string of declines and picked up in January for the first time in almost a year. Japan’s core consumer price index, which excludes the cost of fresh food, rose 0.1 percent, according to the Ministry of Internal Affairs and Communications – the first annual increase since December 2015.

The rise was largely due to a pickup in energy costs and beat median market forecasts for a flat growth and followed a 0.2 percent drop in December. Data raised hope for the Bank of Japan's efforts in accelerating inflation to its 2 percent target.

Separate data released on Friday showed household spending slumped 1.2 percent in January from a year earlier, marking the 11th straight month of declines. The slump in household spending suggests consumers are unconvinced that wages will increase. The slump in household spending showed why economic growth and inflation have lagged the more ambitious goals set out by policymakers

Low inflation in Japan remains the biggest hurdle for the Bank of Japan whose aggressive easing failed to accelerate inflation. Companies remain hesitant to boost wages, forcing the bank to revamp its policy last year to one better suited for a long-term battle against deflation.