Consumer prices in Japan have fallen as sharply as they were last in 2010. Excluding the volatility-prone food prices, the rate of inflation fell by 1.0 percent year-on-year in December, according to government data on Friday.
The average expectations, however, were a decrease of 1.1 percent. “Consumption is slowing down sharply. Therefore, retailers cannot raise their prices. Japan is indeed under deflationary pressure,” said economist Takumi Tsunoda of the Shinkin Central Bank Research Institute. This also increases expectations of the Japanese central bank to take more effective ways of combating the economic consequences of the coronavirus pandemic, it said.