Despite a new batch of promising data out of Japan on Friday, deflation—a key part of the destructive economic spiral that Prime Minister Shinzo Abe has vowed to reverse—stubbornly persisted. Core consumer prices fell 0.4% in April from a year earlier, for a sixth straight month of declines, showing that Abenomics may be an unprecedented boost to the stock market, but it’s no magic wand.
Other economic data was rather more positive. Industrial output rose 1.7% from March to April, manufacturing expanded in May, and the Nikkei recovered some recent lost ground, climbing 1.4%.
Most analysts have not lost hope that Japan will break out of its near two-decade spiral of deflation, but they warn that reaching Abe’s 2% inflation target will take time–perhaps longer than the stated target of two years. “I don’t think inflation will pick up by this autumn,” an economist at Mizuho Corporate Bank told Dow Jones Newswires. “The question is what the Bank of Japan is going to do this autumn and next spring. There aren’t many cards left in their hands.”