Japan's prices, wages keep falling in December

Japan's economy took baby steps forward in December as unemployment eased and factory output rose.

It could not, however, shake off a troubling combination of falling prices and wages that only worsened during the month and threatens to hamstring recovery.

The government released a slew of data Friday that offered both hope and uncertainty for the world's second biggest economy. While Japan appears unlikely to fall into recession again _ as some have feared _ it faces a murky future under entrenched deflation.

"The bottom line is that a double dip is unlikely in Japan," said Kyohei Morita, chief economist at Barclays Capital in Tokyo. …