The government on Friday stopped short of declaring the death of deflation in its September economic report, but dropped the dreaded word for the first time since April 2001.
For Prime Minister Junichiro Koizumi, the report represents the last assessment of his administration's economic achievements before he steps down at the end of the month.
One of Koizumi's economic policy goals was to defeat deflation, which has haunted the country for much of the past decade. Although he originally intended to beat it by March 2007, he still wanted to make a quick optimistic announcement on it before leaving office.