Monday, May 4, 2009

Japan Edges Back Into Deflation

Tokyo, May 1 - Japna has edged back into deflation, less than two years after it last escaped it, and joblessness is rising at a record rate, adding to the strains for the Japanese economy even as hard-hit manufacturers shows signs of stabilising. Analysts expect deflation to accelerate to a record rate in coming months as the worst global recession in 60 years forces companies to cut prices, on top of sharp falls in commodity prices.

And as long as the banks continue to tighten lending, deflation will remain a very big threat in this country.

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