Japan's consumer prices continued to fall

The sharpest drop in prices in ten years is fueling fears of deflation

Consumer prices in Japan have fallen more than they have been in almost ten years. Excluding the fluctuating food and energy prices, the rate of inflation fell by 0.7 percent in October compared to the previous year. This came out from government data on Friday. The last time there was such a sharp decline was in March 2011.

Experts said on Friday that the effect of the VAT hike from last year was gradually fizzling out. Given the coronavirus pandemic, consumer prices are likely to continue to fall for the time being. This is fueling concerns about a return of deflation in Japan.