Japanese consumer inflation was up 2.9 percent year-on-year in October as the government reduced subsidies for electricity and gas bills, government data showed Friday.

The figure for the world's third-largest economy, which excludes volatile fresh food prices, followed a 2.8 percent on-year jump in September. 

"The drop in electricity and city gas bills shrank although the rise of gasoline prices narrowed," a statement accompanying the data release said.

The reading was slightly below market expectations of a 3.0 percent increase in a Bloomberg survey.

Stripping out fresh food and energy, Japan's prices rose 4.0 percent, data published by the Internal Affairs Ministry showed.

September marked the first time inflation slowed to below three percent since August 2022. 

Prime Minister Fumio Kishida's government has been providing subsidies for gasoline since January 2022 and electricity and gas since the beginning of this year. 

They decided to continue the aid, which was originally scheduled to end in September but halved the subsidy amount for electric and gas fees from October. 

Earlier this month, Kishida, whose poll numbers are at a record low, announced a stimulus package worth more than $100 billion as he tries to ease the pressure from inflation.

The supplementary budget for this package is expected to pass the Lower House on Friday, public broadcaster NHK reported. 

Japan, like other economies around the world, has seen prices rise on the back of the Ukraine war, while a weaker yen has also made imports more expensive.

Unlike other major central banks that have raised interest rates, the Bank of Japan has stuck to its ultra-loose monetary in the expectation that inflation will ease, adding to pressure on the yen.