Japanese center consumer prices fall a record by 2.4% in August it is the fourth consecutive month of record fall. Consumer prices dropped largely in not the fewer 38 years in August it may worsen the risk of extended deflation and may hinder the countries improvement from recession.

World’s second largest economy Japan encounter lengthened period of deflation during the 1990’s.Record fall arise due to cheaper oil prices and other energy costs as well as weak domestic demand. Reduced price emerge to be a great thing however deflation can obstruct development through glooming companies earning. Consumer may delay purchases primarily in wage cuts and production, adding to large debt problem. By 2009, there was a growth during the second quarter of the year. Companies like Fast Retailing Co to Sony Corp are lowering prices to attract consumer. On the other hand, central bank has applied low interest rates and stimulus packages to prevent deflation however, analysts are not much confident with this step. There are reports oil price to reduce more by the end of this year. Susumu Kato chief economist at Calyon Securities mentioned reflecting stagnant retail sales and fall in prices are spreading more broadly than expected so there are chances that deflation might continue longer than expected. Bank of Japan forecast deflation to last until year to 2011 March. It is important not to overreact with current foreign exchange moves uttered Hirohisa Fujii Finance minister of Japan.