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Japan family spending falls before sales tax hike
Japanese household spending falls ahead of looming sales tax hike, inflation muted
Associated Press
2014-03-28 09:22 AM

TOKYO (AP) -- Japanese household spending has fallen by 1.5 percent in February from a year earlier, suggesting consumers are tightening belts ahead of an April 1 hike in the country's sales tax.

The government also reported Friday that core consumer prices rose 1.3 percent in February, though a large share of the increase was due to rising energy costs.

Prime Minister Shinzo Abe wants to spur inflation to pull Japan out of a two-decade economic slump. The strategy hinges on getting consumers and businesses to make purchases sooner rather than later. But so far wages have not risen, and the rising cost of living seems to be triggering still more belt-tightening.

Starting next month, Japan's sales tax will rise from 5 percent to 8 percent. Economists expect that will drag on growth.

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