deflation is hard to combat

The numbers in Japan are getting worse.

Why buy now if things will be cheaper later?

GDP Deflator

Even so, the revival from Japans worst postwar recession hasnt spread fast enough to spur prices. Yesterdays report showed the GDP deflator tumbled 3 percent, the biggest drop since records began in 1955, and the domestic demand deflator, a gauge that excludes imports, slid 2.9 percent.

Sharper declines in prices may stall consumer spending and squeeze profits at retailers including Aeon Co., Japans largest supermarket operator, as households delay purchases in anticipation of cheaper goods.

Prime Minister Yukio Hatoyama is trying to maintain a recovery from Japans worst postwar recession as his popularity declines ahead of a July upper house election. With the governments ability to provide further stimulus limited by the worlds largest debt burden, it may turn to the Bank of Japan to do more to spur the economy, said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.A7xVPbN2xE&pos=3