May 1, 12:40 AM EDT

Japan central bank keeps stimulus policy unchanged as prices edge higher , jobless rate falls


AP Photo
AP Photo/Eugene Hoshiko

Multimedia
Archery on horseback still draws crowd
Ainu Rebels reclaim cultural pride
Japanese defend whaling tradition
Japan deals with 'Minimata Disease'
Latest News
Japan prime minister ends US visit with a tour of the University of Southern California

Japan's conservative ruling party gears up to revise pacifist constitution within 2 years

Japan central bank keeps stimulus policy unchanged as prices edge higher , jobless rate falls

Japan inflation nudges higher in March, with core CPI at 2.2 percent, but target still far off

Japan's government proposes cutting greenhouse gas emissions up to a quarter by 2030

Buy AP Photo Reprints
Multimedia
A district summary of the Beige Book
Measuring economic stress by county nationwide
Mall malaise: shoppers browse, but don't buy
Unemployment by the numbers
Family struggles with father's unemployment
Saying an affordable goodbye
Hard times hit small car dealer
Latest Economic News
IMF says Asia to lead growth in 2015, helped by lower oil prices, despite slowdown in China

EU announces raft of plans to strengthen, unify digital market to better compete globally

While survey points to eurozone businesses in robust mood, figures show big retail sales drop

Hit by slashed oil prices, Africa's biggest producer surviving on borrowed cash

US services firms grew at a faster pace in April, driven by more orders and uptick in hiring

Australia cuts its benchmark interest rate quarter percentage point to record low of 2 percent

US manufacturing expands in April; evidence of less hiring despite increase in new orders

Japan central bank keeps stimulus policy unchanged as prices edge higher , jobless rate falls

Puerto Rico's economic future in limbo after legislators vote down governor's tax proposal

Russia cuts key interest rate by 1.5 percentage points to help economy as ruble stabilizes

Interactives
Greece's Debt Threatens to Spread
State budget
gaps map
Auto industry problems trickle down, punish Tennessee county
Women give old Derby hats a makeover in tough economy
S.C. town deals with highest unemployment in South
How mortgages were bundled and sold as securities
Tracking the $700 billion financial bailout
Tracking the year's job losses
State-by-state foreclosures since 2007
Credit crisis explained
Presidents and their economic legacies
Lexicon of the financial crisis
Americans' addiction to debt

TOKYO (AP) -- Japan's core inflation rate edged up in March and unemployment eased slightly, according to data released Friday, offering glimmers of promise for the world's No. 3 economy as it struggles to get growth back on track after years of stagnation.

Though a decline in factory output and other key measures were less encouraging, the central bank kept its ultra-loose monetary policy unchanged in a policy meeting Thursday. Some investors and analysts expected additional stimulus to be announced.

The central bank governor, Haruhiko Kuroda, acknowledged that his target of 2 percent inflation, excluding the impact of an April 2014 increase in the sales tax to 8 percent from 5 percent, remains elusive. He said actual inflation is flat at 0 percent and it might take three years, instead of the two years he originally aimed for, to reach that goal.

Core inflation, excluding volatile food prices, ticked up to 2.2 percent in March from 2.0 percent in February, the government reported. It said that excluding both food and energy, the consumer price index rose 2.1 percent, compared with 2.0 percent in February.

The unemployment rate slipped to 3.4 percent in March from 3.5 percent the month before, matching the level last seen in December.

However, a survey of purchasing managers by Markit for April showed declines in both production and new orders, with the index dropping below the 50 level which differentiates expansion from contraction to 49.9.

The latest "data signaled worsening operating conditions in the Japanese manufacturing sector," Amy Brownbill, an economist at Markit, said in an analysis of the survey.

"Production contracted for the first time since July 2014, underpinned by a further decline in new orders. Meanwhile, growth in new export orders slowed to the weakest in the current 10-month sequence of expansion."

Data released Thursday showed industrial production fell 1.2 percent in March from a year earlier and 0.3 percent from the month before, a milder decline than the more than 2 percent drop many manufacturers and analysts had expected. But a further fall is forecast for April.

Prime Minister Shinzo Abe, on a U.S. tour, has sought to raise confidence in his government's economic recovery strategy, which hinges on lavish monetary easing, public works spending and longer-term reforms.

The policies have yielded mixed results, with share prices soaring and the value of the yen plunging thanks to massive injections of cash into the economy by the central bank through its purchases of bonds and other assets.

The economy fell into recession following the sales tax increase that broadsided demand. The Bank of Japan expanded its asset purchases in October to help counter the malaise, but growth has remained flat despite a mild recovery in exports.

Japan is still on track for a "moderate recovery," the central bank said in its latest assessment of the economic outlook. But it acknowledged a raft of uncertainties that could either support faster growth or drag it down, including weaker demand for Japan's exports to China and the U.S.

The U.S. economy expanded at a mere 0.2 percent pace in January-March, the slowest rate in a year, and China's economy has also slowed more than anticipated.

Economists point to sluggish corporate investment as a factor slowing U.S. growth. That is a problem shared by Japan as companies opt to invest overseas rather than in a shrinking home market where the population is declining and fast aging.

Wages have also failed to pick up significantly for most workers, whose incomes are not keeping up even with the modest inflation seen so far under Abe. That in turn has undermined consumer demand, sapping growth.

© 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.