The consumer price index (CPI) in Japan registered a substantial decline of 2.4 percent in summer 2009, but since then the year-onyear pace of decline has been slowing steadily. The year-on-year rate of decline in the CPI for October slowed to 0.1 percent if the effects of subsidies for high school tuition are excluded.
With regard to the outlook, as the aggregate supply and demand balance will gradually improve, the year-on-year change in the CPI is projected to enter positive territory in fiscal 2011 and thereafter rise through fiscal 2012 (Chart 5). Of course, the outlook presented here is subject to substantial uncertainty, since the economy changes continuously.