Deflation Signs Spur Fears of a Drag on Japan's Recovery

more in Business »

BY YUKA HAYASHI

TOKYO -- As the world resumes economic growth after the steep global downturn, a familiar problem may keep Japan from following: deflation.

Economists expect the Bank of Japan in its semiannual outlook Friday to forecast that the core consumer-price index will fall for the fiscal year ending in March 2012, at a rate of at least 0.5%. That represents three years of expected deflation. The central bank has projected a decline of 1.5% for the current fiscal year and 1% for the next.

Economists see little immediate risk of Japan entering a deflationary spiral, in which price declines accelerate as ...

Copyright 2012 Dow Jones & Company, Inc. All Rights Reserved

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit

www.djreprints.com

Available to asia.WSJ.com subscribers

  • Clampdown in China on Corporate Sleuthing

    Short sellers and other investors seeking to do research on Chinese companies say that a crackdown by Beijing is making their work more difficult and that some researchers have been harassed.

  • De Beers Reduces Diamond Output

    De Beers, the world's largest producer of rough diamonds, is paring back its output for this year in response to slightly weaker demand.

Most Popular In Asia