Japanese consumer prices fall at fastest rate in decade

Nationwide core index down 0.7% in October from a year earlier

October's decline in Japanese consumer prices compared to a year earlier was largely a result of inflation jumping the previous year due to a hike in the sales tax to 10% from 8%. © Reuters

November 20, 2020 09:36 JST

Updated on November 20, 2020 10:14 JST

TOKYO (Reuters) -- Japan's core consumer prices fell in October at their fastest annual pace in nearly a decade as the boost from last year's sales tax hike petered out, heightening fears of a return to deflation for an economy still dealing with COVID-19.

Analysts expect consumer prices to continue falling in coming months due to sluggish consumption, casting doubt on the central bank's view Japan will eventually see prices bounce back towards its elusive 2% inflation target.