Japan inflation stuck at 0.7pc

Japanese inflation was stagnant in May, government data indicated Friday, and still far below target as the Bank of Japan shows little sign of winning its long battle against deflation.

Prices in the world's third-largest economy rose by 0.7 percent year-on-year in May, the same level as the previous month and in line with market expectations.

The country's central bank and government had set an inflation rate of 2.0 percent as the target to boost the economy but the Bank of Japan last month quietly dropped the goal.

With fresh food and energy stripped out, prices rose by even less -- just 0.3 percent in May, the ministry said.

Japan has battled deflation for many years and the central bank's ultra-loose monetary policy appears to be having limited impact.

The Bank of Japan has signalled it has no plans to drop its policy, despite tightening moves in other major economies.