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TOKYO — Japan's jobless rate improved in August, but prices fell for the 18th straight month as a strong yen extended deflation's hold on the economy.
The seasonally adjusted unemployment rate fell to 5.1 percent in August, the government said Friday. The result marks the second straight month of decline and follows a 5.2 percent reading in July.
Meanwhile, the core consumer price index, which excludes fresh food, retreated 1 percent in August from a year earlier, the Ministry of Internal Affairs and Communications said.
The results, which matches Kyodo News agency's average market forecast, reflect the effects of a strong yen, which pushed import prices lower.
Friday's numbers wrap up a week of economic data that confirmed growing worries about Japan's export-driven recovery.
Trade figures on Monday showed that overseas shipments slowed for the sixth straight month. In the central bank's "tankan" survey released Wednesday, companies said they expect business sentiment to decline this quarter. On Thursday, the government said industrial output unexpectedly fell for the third straight month as cooling global demand pressured companies to cut production.
Analysts say the string of bad news is likely to convince the central bank to introduce new monetary easing steps when it meets next week.
The yen remains a serious threat even after authorities intervened in currency markets earlier this month for the first time in six years. The action initially bolstered the dollar to above 85-yen levels, but it has recently weakened to under 84 yen.
The preliminary core CPI for Tokyo — considered a barometer of broader price trends — fell 1 percent in September, pointing toward another nationwide drop this month.
While lower prices boost individual purchasing power, deflation is generally bad for the economy overall. It plagued Japan during its "Lost Decade" in the 1990s, hampering growth by depressing company profits, sparking wage cuts and causing consumers to postpone purchases. It also can increase debt burdens.
The labor market data was slightly more encouraging.
The total number of jobless stood at 3.37 million, down 6.6 percent from the previous year, the government said. Those with jobs slipped 0.3 percent to 62.78 million. The unemployment rate only counts those who are actively looking for work, not those who have dropped out of the job market entirely.
In a separate report, the ministry said average monthly household spending rose a real 1.7 percent in August. The upswing, however, may falter following the expiration of the government's eco-car subsidies.
