May 28, 9:12 PM EDT

Mixed signals as Japan's core CPI muted at 0.4 percent in April; jobless rate at 18-year low


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TOKYO (AP) -- Japan's jobless rate dropped to an 18-year low in April, but industrial production, inflation and household spending were muted as consumers kept purse strings tight.

The government said Friday that the unemployment rate was 3.3 percent in April, the lowest since April 1997, as firms stepped up hiring.

However, the rising competition for labor has had a limited impact on wages, with any income increases coming in the form of bonuses and other incentive pay.

The core consumer price index, excluding volatile food prices, rose 0.4 percent, partly due to a fall in energy costs thanks to cheaper crude oil. That is well below the 2 percent inflation target set by the central bank and government two years ago.

Aggressive monetary easing by the Bank of Japan, combined with pressures pushing the U.S. dollar higher have pulled the Japanese yen to its weakest level against the dollar since 2002.

Share prices have meanwhile surged to 15-year highs.

Japan's economy emerged from recession late last year, growing at a faster-than-expected 2.4 percent annual rate in January-March. But economists say weak factory output will likely keep growth flat in this quarter.

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