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Prices in Japan fall at record rate

September 29, 2009|Times Wire Reports

Japan's consumer prices fell at a record pace in August, heightening the risk that prolonged deflation may hamper the country's recovery from its deepest postwar recession.

Prices excluding fresh food slid 2.4% from a year earlier, the most since the price survey began in 1971, the government said Tuesday.

Firms are cutting prices to attract consumers facing record unemployment and sinking wages. A return to the deflation that Japan just shook off in 2005 may weigh on economic growth as people and companies delay spending, expecting prices will keep falling.

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