While prospects of accelerating inflation offer some relief for the BOJ, many central bankers remain wary. They would much prefer that reaching their ambitious 2 percent inflation target be the product of improving activity or consumer sentiment, not external factors such as oil and currency moves.”Consumer prices will start rising ahead. But for inflation to approach 2 percent, companies must more actively distribute profits” to households through wage hikes, said Takeshi Minami, chief economist at Norinchukin Research Institute.

The prospect of that happening is not bright. Nearly two-thirds of Japanese firms are considering no wage hikes this year, a Reuters poll showed.Core consumer prices, which include oil products but excludes volatile fresh food prices, slipped 0.2 percent in December from a year earlier, government data showed, roughly in line with a median market forecast for a 0.3 percent fall.It was the 10th straight month of declines but the smallest fall since February, when there was a flat reading, as gasoline and fuel costs rebounded from last year’s lows.Core consumer prices in Tokyo, considered a leading indicator of nationwide trends, also fell less sharply. In January, they declined 0.3 percent from a year earlier, compared with 0.6 percent in December, the biggest annual drop in nearly four years.Growth Pickup Ahead?Japan posted a third straight quarter of annual expansion in July-September and analysts expect growth to pick up in coming quarters, thanks to a recent rise in exports and factory output driven by improvements in emerging economies.Policymakers hope that prospects of a sustained recovery will prompt companies to boost wages and household spending, seen as a soft spot in the world’s third-largest economy.Many analysts expect core consumer prices to turn positive in coming months and head toward 1 percent later this year. But some warn that global uncertainties, such as U.S. President Donald Trump’s protectionist streak, may make big manufacturers cautious of raising wages for fear of declining profits.Overall consumer prices rose 0.3 percent in December from a year earlier, as downward pressure from energy costs dissipated.But prices of durable goods, such as television sets and personal computers, continued to fall, a sign consumption remains too weak for retailers to hike prices.A separate consumer price index compiled by the BOJ, which strips away the effect of energy and fresh food costs, rose just 0.1 percent in December from a year earlier after gaining 0.2 percent in November.The BOJ had blamed slumping oil prices as among factors that hampered achievement of its 2 percent target and argued a steady rise in household income will gradually push up inflation.In an attempt to better gauge Japan’s broad price trend, the government said it will begin releasing a new index on consumer prices that covers the same type of goods and services as the BOJ’s index.