Japan's core consumer prices dropped 2.4% in August year-on-year, the fourth successive month of record falls.
Official figures showed core prices, which exclude those of volatile fresh food, fell for a sixth month in a row.
The record fall for August was due to lower petrol and other energy costs as well as weak domestic demand.
Japan, the world's second largest economy, experienced a prolonged period of deflation in the 1990s, commonly referred to as "the lost decade".
Lower prices may appear to be a good thing, but deflation can hamper growth by depressing company profits and causing consumers to postpone purchases, leading to production and wage cuts. It can also increase debt burdens.
The deflation comes despite recent signs of an improvement in the Japanese economy, which returned to positive growth in the second quarter of 2009, exiting a severe year-long recession. read more
