Japan prices fall in March as deflation drags on

Associated Press + More

TOKYO (AP) — Japan's consumer price index fell 0.9 percent in March from a year earlier, the government reported Friday, underlining the challenge of ending a long spell of debilitating deflation despite an onslaught of monetary easing and stimulus spending.

The Bank of Japan was due later Friday to issue an updated inflation outlook that many expect will forecast prices rebounding in the next two years to hit a 2 percent target.

The 0.9 percent decline in prices in March compared with a 0.7 percent drop in February. However the inflation benchmark rose 0.2 percent from the month before.

The government said Friday that core consumer prices excluding food fell 0.5 percent year-on-year.

Prime Minister Shinzo Abe took office in December vowing to vanquish deflation, or falling prices, that tend to discourage business investment and weaken growth.

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