The Bank of Japan's Policy Board agreed that consumer price declines resulting from structural changes in Japan's distribution system are "not a bad thing" and should be distinguished from deflationary drops, according to the minutes of their Feb. 10 meeting released Monday.
Some board members pointed out that, as there remains room for restructuring in the distribution sector, consumer prices could fall due to the lower prices offered by new growth firms entering this sector. The intensification of competition caused by the entry of firms such as volume retail stores for clothing could force prices down, the minutes said.
One member noted that slight declines in consumer prices achieved through companies' efforts to improve services to consumers could boost consumption, which would in turn underpin production and other business activity.