Prices drop in Japan for 20th month

Nov. 26, 2010 at 12:48 AM
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TOKYO, Nov. 26 (UPI) -- Japan has gone through a 20th straight, year-to-year monthly decline in its key consumer price index, the government said Friday.

The report said prices fell 0.6 percent in October from a year earlier, Kyodo News reported. While the decline in the core CPI, which excludes fresh food prices, was less than the 1.1 percent decline in September, it indicates Japan's economy is still in a deflationary mode, the news agency said.

An Internal Affairs Ministry official said the decline was caused, in large part, by temporary factors such as the nation's largest-ever cigarette tax hike invoked Oct. 1.

Kyodo cited some economists who say the drop in prices highlights the difficulty the government faces in achieving its goal of ending deflation within fiscal 2011. Those economists say the Bank of Japan may need to take additional steps to reverse the deflationary trend.

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