Japan's core consumer prices fell 1.1% in May from a year ago, the biggest slide on record amid deflation fears in Asia's biggest economy, the internal affairs ministry said today.
The latest data were in line with expectations, matching the average market forecast.
Core prices, which exclude those of volatile fresh food, fell for the third month in a row after a 0.1% drop in March - the first fall in 18 months.
'The fall of 1.1% is the biggest decline since we began using the current method of statistics in January 1970,' a ministry official said.
Falling energy costs and weak domestic demand during the country's worst recession in decades were blamed in part for the sliding prices.
The core consumer price index for the Tokyo metropolitan area, considered a leading indicator for Japan's consumer prices, fell a preliminary 1.5% in June, the ministry said.
The latest numbers are likely to stoke fears over a return to deflation in the world's number two economy, after Japanese wholesale prices sunk 5.4% in May from a year ago, the biggest drop in more than 22 years.
Japan was stuck in a deflationary spiral for years after its economic bubble burst in the early 1990s, eroding corporate earnings and encouraging consumers to delay their spending in the hope that prices would fall further.
Economists generally believe however that the worst of the current recession is over for Japan, thanks to gradual improvement in exports and production.
