Japan's jobless rate down, prices fall further

Japan's unemployment rate edged down to 4.2 percent in January while the struggling economy remained mired in deflation, official data showed Friday.

The jobless rate slipped to 4.2 percent from a revised 4.3 percent in December, data from the internal affairs ministry showed. The figure was in line with economists' expectations.

A separate survey from the ministry showed prices continued to fall in January with the core index, which excludes volatile prices of fresh food, dropping 0.2 percent on-year.

Prime Minister Shinzo Abe, who took office in December, vowed to pull the world's third-largest economy out of years of deflation. The following month the Bank of Japan adopted a two-percent inflation target.

Deflation is bad for the economy because it encourages consumers to put off spending in the belief their intended purchases will be cheaper in the future, softening demand and hurting producers.