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Monday, 29th November 2010
In General Japan News,

Japan's deflation continues

Consumer prices have fallen for the 20th consecutive month in Japan.

The latest core consumer price index dropped by 0.6 per cent in October compared to the same month in 2009 - a sign that the government may be struggling to control deflation and its impact on the Japanese economy.

"Even though the pace of the fall in prices slowed by 0.5 percentage points, this was not due to an improved demand-supply balance," explained Asushi Matsumoto at the Mizuho Research Institute to BBC News.

He added that a number of one-off measures had led to a rise in the index, especially the recent decision to raise the price of cigarettes.

Last week, government figures showed a slowdown in Japanese export levels as the yen continues to remain strong on international markets pushing up the price of goods from Japan.

Written by Mark Smith.