Friday, May 01, 2009

Everybody Mambo - How Low can the Rising Sun Go?

The BBC reports: Japan moves back into deflation.

Japan's economy has fallen back into deflation for the first time in more than a year, new data for March shows.

On Thursday the Bank of Japan said GDP would shrink by 3.1% in the year to March 2010, compared to an earlier forecast of 2%, but it has argued that a recovery will begin in 2010.

But in its latest update earlier this week it also warned that consumer prices will fall by 1.5%, pushing Japan into deflation.

The Bank of Japan has forecast two years of deflation, which stalked the Japanese economy in the 1990s.

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