DHAKA: Consumer prices in Japan rose at an annual rate of 3.4% in May, the fastest pace in 32 years ,as the effect of the sales tax hike started to be felt.

Japan raised its sales tax rate from 5% to 8% on 1 April.

The price growth in May follows a 3.2% jump in April and is a big boost for Japan's attempt to trigger inflation.

Japan has been battling deflation, or falling prices, for best part of the past two decades and that has hurt domestic demand and stifled growth.

The Japanese government has taken various steps over the past few months to try and reverse this trend, and the country's central bank has set a target of a 2% inflation rate, reports BBC.

The measures, which include boosting the country's money supply, have started to have an impact and consumer prices in the country have now risen for 12 months in a row.

Policymakers have been hoping that once prices start to rise, consumers and business will be encouraged to start spending and not hold back on purchases, as they may have to pay more later on.

BDST: 0910 HRS, JUN 27, 2014