Bank of Japan says end of deflation in sight

The Bank of Japan said on Monday 31 October that the seven-year period of deflation will end in the year to March 2006.

The BOJ predicted a 0.1 percent gain in core consumer prices this fiscal year, reversing a forecast for a decline. Core prices will rise 0.5 percent next fiscal year, it said, compared with an April forecast of 0.3 percent.

Asked how the bank will change policy when it confirms that Japan will not slip back into deflation, Bank of Japan governor Toshihiko Fukui said: 'We are