The key inflation rate may have turned negative in January amid the economic downturn, while the economy possibly faces a "hard landing," Bank of Japan Policy Board member Atsushi Mizuno said Thursday.
The core nationwide consumer price index, which excludes volatile fresh food prices, "may start showing negative year-on-year growth between January and March at the earliest," Mizuno said at a meeting with local business leaders in Gifu Prefecture.
The government is to release the January price data later this month. In December, the core CPI rose only 0.2 percent, marking the smallest gain in 15 months.
Mizuno attributed the possible deflation to weak overseas and domestic demand as a result of the economic slump. The member of the BOJ's decision-making body said recent rises in the yen against other major currencies have also eroded inflationary pressure by pushing down the cost of imports.
The country's economy may have entered a "downward spiral of (growth in) production, income and spending," Mizuno said.