Japan's consumer prices fell at a slower pace in April, signaling gains may soon resume, making it easier for the central bank to raise interest rates. Core prices, which exclude fresh food, declined 0.1 percent from a year earlier, the statistics bureau said today in Tokyo, matching economists' estimates. The measure of inflation fell 0.3 percent in March, the steepest drop in two years.
Rising prices would shore up support for the Bank of Japan's policy of increasing its 0.5 percent benchmark interest rate, the lowest among major economies. Governor Toshihiko Fukui said last week that the bank could raise rates even with prices falling to prevent excessive investment and sustain growth. ``The improvement of consumer prices certainly provides relief and gives the BOJ's arguments some conviction,'' said Eishi Yokoyama, an economist at AIG Global Investment Corp. in Tokyo. ``We're going to see more speculation among investors about an early rate hike.'' Fukui has said prices will rise again once the effect of a gain in oil prices last year fades. The bank needs to increase the key rate as the economy expands and inflation gathers pace, he said.