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Friday, 20th November 2009
In Business In Japan,

Japan back to deflated state

The Japanese economy is experiencing deflation for the first time in three years, it has been announced.

According to the Japanese Cabinet Office, Japan is "in a mild deflationary situation", with the office also warning that any fall in prices could have a negative impact on the still-fragile Japanese economy.

The country came out of its deepest recession since the end of the second world war back in the second quarter of this year and experienced growth of almost five per cent between July and September.

Commenting on the deflation, finance minister Hirohisa Fujii said the situation is cause for concern among Japanese leaders.

"The recent price falls are not right and worrisome," he noted.

Before the country came out of deflation in 2006, it had been in deflation for almost ten years, a time often referred to as the "Lost Decade", when falling prices, wage cuts and decreases in company profits impacted the country.

Written by Kimberley Homer.