Deflation fears spread in Japan after consumer prices fall at record pace

Deflation is clawing its way back in Japan & that's not good news for an economy trying to recover from its worst recession since World War II. Japan's key consumer price index slid at a record pace in May, it said. The core nationwide CPI, excluding volatile fresh food prices, fell 1.1% from the previous year in the third straight month of decline. The result marked the biggest fall since the gov't. began releasing comparable data in 1971. Japan appears to be "heading for another lengthy period of deflation," Richard Jerram, chief economist at Macquarie Securities in Tokyo said.