TOKYO (Reuters) - Japan is no longer in a deflationary situation with consumer prices and corporate profits rising, the country's top currency diplomat said on Friday.

"There are indications Japan's economy is entering a virtuous cycle," with private investment showing signs of improvement and average summer bonuses rising, Mitsuhiro Furusawa, vice finance minister for international affairs, told a forum.

"We are fully committed to implementing all three arrows" of Abenomics, or premier Shinzo Abe's combination of monetary and fiscal stimulus as well as a growth strategy to boost Japan's economic potential, Furusawa said.

He added that the "third arrow" growth strategy to be outlined next month "won't be a disappointment." Furusawa was speaking at a seminar in Tokyo hosted by the International Monetary Fund on revitalising Japan's business sector.