In(de)flation in Japan?

I actually have a link to this in the post below but I still believe it deserves attention above the fold. On the back of this I would really like to hear anybody arguing the BOJ to raise any time soon.

(From Bloomberg)

Japanese inflation unexpectedly slowed in October as oil prices dropped, dashing expectations that the central bank will raise the lowest interest rates among major economies later this month.

Core consumer prices, which exclude fresh food, rose 0.1 percent from a year earlier, the statistics bureau said today in Tokyo, slower than the 0.2 percent median forecast of 36 economists surveyed by Bloomberg News. The unemployment rate dropped to 4.1 percent, close to an eight-year low of 4 percent, a separate government report showed.

Governor Toshihiko Fukui has said the Bank of Japan needs to gradually raise the lowest interest rates among major economies to sustain economic growth and avoid excessive business investment and asset-price bubbles. A slowdown in core prices won't impede the bank's attempt to raise interest rates early next year, said economist Eishi Yokoyama.

``It's clear that energy prices are really weighing on consumer prices and are one reason inflation isn't picking up,'' said Yokoyama, an economist at AIG Global Investment Corp. in Tokyo and one of seven surveyed who correctly predicted the number. ``Recently BOJ policy makers have been very upbeat so this number alone won't deter them from raising rates in January.''

The yield on the 10-year government bond fell 4 basis points to 1.605 percent as of the lunch break in Tokyo, the lowest in more than two months.

Household Spending

Household spending slipped 2.4 percent, less than a 4 percent median estimate of economists, the statistics bureau said in a separate report. The yen traded at 115.57 per dollar at 11:10 a.m. in Tokyo from 115.70 before the reports.

Consumer price gains slowed because of declining oil prices and the inflation trend is unchanged, Economic and Fiscal Policy Minister Hiroko Ota said in Tokyo today. The timing for an interest-rate increase is up to the Bank of Japan, she added.