ID :
311781
Tue, 12/24/2013 - 08:48
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Japan Removes Word "Deflation" from Economic Report in Dec.

Tokyo, Dec. 24 (Jiji Press)--The Japanese government removed the word "deflation" for the first time in four years and two months from its monthly economic report for December, released Tuesday. "Prices hold firm," the Cabinet Office said in the report submitted to the day's meeting of economic affairs ministers. "The country's consumer prices, excluding fresh foods and energy prices, started increasing year on year," a Cabinet Office official said, explaining the reason for deleting the word deflation. It cannot be said that the economy is in a deflationary condition in which prices fall sustainably, the official added. In the previous month, the government said that "recent price developments indicate that the deflation is ending." The government officially declared the return of sustained prices falls in the November 2009 report. In the December report, the government stopped short of declaring an end to deflation amid concerns that prices in the country may return to a downtrend due to possible effects from the consumption tax in April 2014 and the course of the overseas economy. The government said that it "will make its utmost efforts to overcome deflation early." On overall economic conditions, the government kept its basic economic assessment unchanged from the previous month. "The Japanese economy is on the way to recovery at a moderate pace," the December report said. While domestic demand is solid and corporate earnings are improving, corporate capital expenditures are not sufficiently strong for an upward revision of the overall assessment, the official said. The government revised up its assessment on personal consumption for the first time in eight months. "Private consumption is picking up," the report said. The upward revision chiefly reflected solid vehicle and department store sales, the official said. The government upgraded its assessment on imports for the first time in two months, saying that they are picking up. Also upgraded was the assessment on companies' judgment on current business conditions. Business sentiment "is broadly improving," it said. By contrast, the government revised down the assessment on public investment for the first time in 12 months, saying it was solid. The previous assessment said that public investment showed a steady performance. Meanwhile, the government left its assessments on other sectors unchanged, including corporate capital expenditures, housing investment, exports and industrial production. Looking ahead, the government said that "the recovery is expected to take hold as household income and business investment continue to be on upward trends." As for downside risks to the economy, the government cited possible slowdowns of overseas economies and a reaction after a demand increase before the consumption tax increase in Japan in April 2014. END

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