The nation's core consumer prices snapped two straight months of declines in June but risks remain for a prolonged economic slump from the novel coronavirus crisis, which has depressed consumption and raised concerns about a return to deflation.
The core consumer price index (CPI) was flat in June with slower falls in energy prices, helping the gauge out of negative territory. The reading dashed expectations for a third straight month of decline and followed central bank comments last week that the economy would likely shake off the hit from the pandemic.
Japan lifted nationwide state of emergency measures in late May but has seen a renewed spike in infections in Tokyo, stoking fears of a second wave of new cases that could curtail spending in an already weakened economy.