Consumer prices in Tokyo fell for the first time in three years in April and national factory activity slumped, data showed Friday, increasing worries the COVID-19 pandemic could tip the country back into deflation.
The darkening outlook in the world's third-largest economy is already heightening calls for bigger spending, even after parliament approved an extra budget to fund a $1.1 trillion stimulus package to cushion the blow from the still-spreading virus.
"The government will work with the central bank to ensure Japan absolutely does not slip back into deflation," economic revitalization minister Yasutoshi Nishimura told a news conference Friday.