The central government is considering relaxing its definition of deflation amid continuing falls in consumer prices, government sources said Monday.
If the government officially admits that the economy is deflating after revising its definition, the Bank of Japan will inevitably face pressure to ease its monetary grip further, financial analysts said.
In a 1999 report, the government defined deflation as "a condition in which the economy remains in a slump, accompanied by falling consumer prices," which is similar to the definition of a deflationary spiral.