The year-on-year January decline was blamed mainly on a drop in the prices of household durable goods, including air conditioners, putting further pressure on overall prices, the government said Friday.
The core consumer price index, excluding fresh food, stood at 99.1 against the 2010 base of 100, Kyodo News reported.
The government of Prime Minister Shinzo Abe has made it its top priority to lift the economy out of its deflation-induced recession through a number of stimulus measures. Recently, Japan's central bank doubled its inflation target to 2 percent.
Last year marked the fourth consecutive year of deflation. Such a phenomenon of falling prices hurts the overall economy as consumers refrain from purchases in anticipation of additional price cuts, which hits demand and forces businesses to cut expenses and employment, creating a spiraling effect.
Stimulus measures have brought down the value of the yen against other major currencies, which should help boost exports.