Daiwa Securities economist Kento Minami said weak growth data on Monday make it unlikely the government will declare Japan out of deflation within the fiscal year to March 2027. Sanae Takaichi's government has said it will closely assess whether the economy is strong enough to avoid slipping back before announcing an end to deflation; markets are watching timing because it could affect the government's stance on pressing the Bank of Japan for further tightening. Minami said fundamentals are impr

Daiwa Securities economist Kento Minami said weak growth data on Monday make it unlikely the government will declare Japan out of deflation within the fiscal year to March 2027. Sanae Takaichi's government has said it will closely assess whether the economy is strong enough to avoid slipping back before announcing an end to deflation; markets are watching timing because it could affect the government's stance on pressing the Bank of Japan for further tightening. Minami said fundamentals are improving and that inflation, the output gap and unit labor costs point to a lower risk of a return to sustained deflation.