"Those numbers still show inflation hovering at about 5 percent."

But as the data showed a weaker economy and less inflation, the expectation of higher interest rates disappeared.

Various other measures also show inflation to be edging down.

The market was weighed down by a Government report on producer prices showing inflation at the high end of expectations.

The bank, however, has found itself waiting for Japan's economy to show stronger signs of growth, and particularly a rise in prices, or inflation.

Pushing the market higher are the continued data showing both slow economic growth and low inflation.

He also said that data showing continued low inflation make the longer end of the bond market a little more attractive.

How does that square with the latest figures showing low inflation?

The stock market turned sluggish yesterday despite new data that showed benign inflation.

This price measure showed inflation rising at a 2.5 percent annual rate in the second quarter.