Officials warn Japan's deflation not yet over

Japanese Prime Minister Junichiro Koizumi said on Friday 27 January that although the key CPI rose for the second straight month in December, the country's economy has not yet emerged from deflation.

"We cannot say the state of mild deflation has been overcome," Kyodo News quoted Koizumi as telling reporters at his official residence.

"There is no change in our view that moderate deflation continues," Chief Cabinet Secretary Shinzo Abe told a news conference after the CPI data was released.