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Japan escapes deflation, but it might return: Minister

Published on Jan 21, 2014 12:12 PM

TOKYO (REUTERS) - Japan appears to have escaped deflation for now, Economics Minister Akira Amari said on Tuesday, but warned that the risk of it returning cannot be ruled out as policy makers continue their efforts to foster sustainable growth.

Mr Amari said it is important that wages rise faster than consumer prices and that he will closely watch annual wage negotiations that will take place this spring.

Tokyo's aggressive fiscal and monetary stimulus over the past year has sparked a recovery in the world's third-largest economy.

However, capital spending and wage rises have been slow to catch-up, leading some analysts to doubt that inflation can reach the Bank of Japan's 2 per cent goal.

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