Japan's Deflation Ending: Govt Monthly Report

Tokyo, Aug. 15 (Jiji Press)--Recent price developments indicate that Japan's deflation "is ending," the Japanese government said Thursday. In a monthly economic report for August, the government thus painted a brighter picture on domestic prices. Last month, the government said deflation was "easing." Meanwhile, the government kept its basic economic view unchanged. "The Japanese economy is picking up steadily and shows some movements on the way to recovery," said the report prepared by the Cabinet Office. A positive cycle is progressing for production, incomes and spending, pushing the economy closer to self-sustained recovery, an official of the Cabinet Office said. The official also noted recent positive price-related data, including turnarounds for core consumer prices, the gross domestic product deflator and unit labor costs. "Deflation in the sense of a sustained fall in prices is coming closer to an end," the official said. But the government will not declare a full end to deflation unless it is sure that prices will not fall back into negative territory again, he added, noting that this will be "a significantly high hurdle" to clear. The government has used the word "deflation" to describe the domestic price situation since November 2009. The government noted signs of change in the current deflationary phase in May this year and an easing of the situation in July. In August, the government upgraded its view on employment, saying that the employment situation is improving. Last month, the government mentioned "some severe aspects" in the job situation. Japan's jobless rate for June fell below 4 pct for the first time in nearly five years, the government reported late last month. The government kept unchanged its August assessments for exports, production, corporate capital expenditures, business sentiment and consumer spending. END