Reply #7: China economy improves but deflation haunts Japan

[ozymandius]

BEIJING/TOKYO (Reuters) – China's economy is showing some signs of improvement, but a big fall in wholesale prices in Japan suggested the world's second-largest economy was sliding back toward deflation.

A jump in China's industrial output last month, along with a record rise in new lending, gave further credence to the idea that the bottom of the worst global crisis since the Great Depression may not be far away.

The solid data lifted the Chinese yuan, as well as stocks and copper prices in Shanghai, leading Asian equities higher.

.....

And while things were looking modestly brighter in China, the economic situation in Japan remained bleak.

Wholesale prices are falling at their fastest rate since 2002, March figures showed on Monday, as weakening domestic demand on top of falling commodity prices drives Japan toward its second bout of deflation this decade.

With interest rates already almost at zero, analysts say the Bank of Japan has limited weapons to fight deflation in the country's worst recession since World War Two.

http://news.yahoo.com/s/nm/20090413/bs_nm/us_financial