(PTI): Japan’s core consumer price index has fallen for the fourth straight month in August, the fastest pace since records began in the early 1970s.

According to official figures released by Japan’s Statistics Bureau, core prices, which have been on the fall since March, dropped 2.4 percent in August from a year ago, compared with a 2.2 percent decline in July.

The deflation comes as Japan returned to growth in the second quarter of 2009, exiting a severe year-long recession.

Lower prices and deflation can hinder growth by reducing company profits and causing consumers to postpone purchases, leading to production and wage cuts.

Japan, the world’s second largest economy, experienced a prolonged period of deflation in the 1990s, commonly referred to as ‘the lost decade’.

Japan’s economy has climbed out of recession in the second quarter of the year to become the third developed country after Germany and France to end the economic downturn.

The world’s second largest economy posted a 0.9 percent growth in the three months ending in June, after four consecutive quarters of contraction — the longest recession in at least 60 years.