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Japan Lacking Fiscal Plan May Be Deflation Cause, Shirakawa Says

Japan’s absence of “concrete reform plans” for the nation’s finances may be contributing to deflation and sluggish economic growth by discouraging spending by the public, central bank Governor Masaaki Shirakawa said.

Consumers may be limiting spending “on concerns over future fiscal developments,” Shirakawa said in remarks prepared for an event in Washington yesterday. This may be “one factor behind sluggish economic growth and mild deflation,” he said.