Consumer prices fell at a record pace in May, adding to signs that a return to deflation may hamper a rebound from the nation's worst postwar recession.
Consumer prices excluding fresh food fell 1.1 percent from a year earlier after edging down 0.1 percent in the preceding two months, the statistics bureau said Friday in Tokyo. It was the sharpest drop since the survey began in 1971.
Bank of Japan Gov. Masaaki Shirakawa said last week that price declines will accelerate through the middle of the fiscal year as demand slackens and crude oil continues to trade lower than last year's record. Retailers including Aeon Co. are cutting prices to attract customers as falling wages and the worsening job outlook damp spending.