The government dropped the word "deflation" in its monthly economic report Tuesday for the first time in more than four years amid signs of growth in consumer spending, but it refrained from announcing the end of deflation because prices could still fall back.
In its December report, the Cabinet Office said consumer spending — comprising about 60 percent of Japanese gross domestic product — is "picking up," raising its assessment of this category for the first time in eight months.
The Abe administration left its basic assessment unchanged, saying the economy "is on the way to recovery at a moderate pace."