Japan at 'inflection point' in 25-year battle with deflation - govt

Japan may be reaching an inflection point in its battle with deflation as price and wage rises broaden, potentially leading to an end to prolonged stagnation and a phase-out of fiscal and monetary support, according to the government's annual economic white paper.

reuters.com

Relevant topic timeline:

8/24/2023

Tokyo CPI inflation eases more than expected in August By Investing.com

Consumer inflation in Tokyo grew at a slower pace than expected in August, but the core figure, which excludes fresh food and energy costs, remained at its highest level in over 40 years, indicating that inflationary conditions in Japan remain high and putting pressure on the Bank of Japan to eventually tighten policy.

8/29/2023

Just as China faces a Japan-style ‘lost decade,’ Japan thinks it’s near a ‘turning point’ in decades-long deflation battle

China's economic troubles, including a real estate crisis, an aging population, and rising debt, resemble Japan's long-standing issues, leading some experts to predict a potential "lost decade" for China similar to Japan's economic stagnation in the 1990s, while Japan is showing signs of climbing out of its deflationary nightmare.

8/31/2023

China’s Leaders Could Stem the Economic Slide. A Desire for Control Is Getting in the Way.

If China were to slip into a deflationary spiral like Japan in the 1990s, it could lead to a decrease in consumer spending, a weakened economy, and negative consequences for the rest of the world, including a slowdown in imports for the US and adverse effects on developing economies reliant on Chinese exports and investment.

9/22/2023

BOJ May Hike Rates Soon If Yen Weakness Triggers Inflation

If the Japanese yen weakens beyond 150 to the dollar, the Bank of Japan could be forced to hike rates sooner than expected, which may lead to the unwinding of the yen carry trade and a return of Japanese capital to domestic bond markets, potentially triggering market volatility.

Topics

Posted 8/29/2023, 1:28:00 AM