Deflation moderated in February even before the country's worst earthquake on record and the ensuing tsunami and nuclear crisis this month push up energy and food costs.
Consumer prices excluding fresh food declined 0.3 percent from a year earlier, the statistics bureau said Friday, matching the median estimate of 23 surveyed economists.
The March 11 disaster may cause gross domestic product to shrink by as much as 12 percent on an annualized basis in the second quarter, Morgan Stanley MUFG Securities Co. predicted. The shortage of daily necessities caused by the quake may push up prices, while the weakening economy may dampen consumption and hurt price gains, economist Yoshiki Shinke said.