Japan fin min Kato: Japan still not in a state where we can call end to deflation

March 13, 2025
-FCHFX

March 13, 2025 at 02:52AM

Japan’s economy is a state of experiencing a supply shortage rather than a lack of demand

Don’t have a plan to modify the joint government and BOJ statement on ending deflation

Japan transitioning to an economy where price raises are driven by import costs to one driven by wage gains

Judging from underlying inflation and comprehensive price gauges, Japan is still not in a state where we can permaently call the end to deflation

This comes after signs of higher wages in union negotiations.

In the bigger picture, I suspect Japan fighting to end deflation will be like an evil genie who grants you a wish only to twist it. Japan is sitting on a debt bomb and deflation is the only thing that’s kept it from igniting.

This article was written by Adam Button at www.forexlive.com.

Japan fin min Kato: Japan still not in a state where we can call end to deflation