As to falling prices in Japan, the government will "eventually make some kinds of references in a monthly economic report," Kan, also minister for economic and fiscal policy, said at a press conference.

"It appears that the (Cabinet Office) has a practice of expressing that (the nation) is in a deflationary state when various data showing signs of deflation continue for a certain period of time," he said.

If realized, it would be the first time for a reference to deflation to appear in the monthly assessment since August 2006.

Sources close to the matter said Monday the government began to consider the matter as Japan's preliminary gross domestic product data for the July to September period showed that the domestic demand deflator, a gauge of price trends, dropped 2.6 percent for the largest slide in 51 years.

The nationwide consumer price index declined for seven consecutive months through September.

The Cabinet Office, which is in charge of compiling the GDP data, defines deflation as "a state in which prices fall continuously."