The Japanese government said Wednesday prices are "rising moderately," using the words in its monthly economic report for the first time since October 2008.
"Consumer prices are rising moderately," the Cabinet office said in its monthly economic report for February. In December, the Cabinet office dropped the word "deflation" for the first time in four years.
But the Cabinet office refrained from declaring the end of deflation. Consumer prices rose 0.4 percent in 2013 from the previous year, the first increase in five years.
At a news conference on Tuesday, Bank of Japan Governor (BOJ) Haruhiko Kuroda showed confidence that the Japanese economy is on track toward BOJ's 2-percent inflation goal by fiscal 2015 to beat deflation.
Last April, the BOJ launched a massive monetary easing program to end deflation that has lasted for nearly 15 years and achieve the 2 percent inflation target.
The Cabinet office maintained its basic economic assessment for February, saying the world's third-largest economy "is recovering at a moderate pace," while raised its views on employment and exports.
"The employment situation is improving steadily," and "exports are flat," it said. The report also expressed concern over the potential negative impact on the economy of of the planned sales tax increase in April, from the current 5 percent to 8 percent.