Consumer prices fell for the first time since June, casting doubt on the central bank's forecasts for the world's third-biggest economy to emerge from more than a decade of deflation.
Consumer prices excluding fresh food slid 0.1 percent in October from a year earlier, the statistics bureau said in Tokyo on Friday. Barclays Capital says declines may persist for two years even as the BOJ forecasts gains of 0.1 percent for the fiscal year starting in April and 0.5 percent in the following 12 months.
Commodity prices are sinking on the risk of another global slump, while a yen trading near postwar highs has cut the cost of imports. As Japan struggles to recover from the March disasters, declining prices may weigh on consumer spending and erode company profits.