Japan has reported weak economic data, underlining the challenges the new government will face in reviving growth in the world's third-largest economy.
Industrial output fell in November as demand for exports continued to slow.
Consumer prices also dipped, indicating that deflation continues to remain a hurdle in boosting domestic demand.
Japan has been seeking to stimulate domestic demand to counterbalance the decline in exports, which have fallen for six months in a row, and sustain growth, the BBC reports.
According to the latest data, the core consumer prices index, which excludes fresh food, fell 0.1 percent in November, from a year earlier.
Martin Schulz of Fujitsu Research Institute said that this is a clear indication that deflation is really ingrained in Japanese economy and it is inevitable that the central bank will have to do something to tackle it, the report said.
Japan's central bank, the Bank of Japan, is already under pressure from new Prime Minister Shinzo Abe to take steps aimed at tackling deflation.
Abe has called upon the bank to raise its inflation target to 2 percent, which is double its current target.
During his election campaign, Abe had also suggested that the central bank should print 'unlimited' yen to help stoke an increase in consumer prices.
According to the report, industrial output has been hurt by a dip in demand for Japanese exports from key markets such as eurozone and China.
The ongoing debt crisis in eurozone has hurt shipments to the region, while sales to China have been hurt by a territorial dispute between the two countries.
The strength of the Japanese currency over the past few months has only made matters more difficult for Japanese exporters; their goods became more expensive for foreign buyers, the report said.
However, the yen has seen a significant drop in recent weeks, falling more than 10 percent against the US dollar since October, the report added. (ANI)