**Deflation has returned to the Japanese economy for the first time since 2006, the government has warned.**The Cabinet Office said the falling prices could hurt the recovery of the economy, which left recession in the second quarter of this year.
Despite the government’s announcement, the Japanese central bank kept interest rates on hold at 0.1%.
The Bank of Japan said the Japanese economy was continuing to be helped by policy measures at home and abroad.
Japan’s economy grew by 4.8% in the July-September period - the second consecutive quarter of growth.
Some investors think the government wants the central bank to do more to stop prices from falling.
“We have no specific ideas in mind at the moment,” said Keisuke Tsumura, parliamentary secretary of the Cabinet Office.
“It will depend on how discussions develop in the future.”