http://www.cnbc.com/id/102441129?__source=yahoo%7cfinance%7cheadline%7cheadline%7cstory&par=yahoo&doc=102441129#.
The article talks about how the Japanese common man is worried about the rising prices and inflation. Super market prices have gone up by a massive 34% in 6 months. The Yen has been devalued by 27% since April 2013.
However, facts show that there is not much inflation in Japan. Japan has been combating deflation for decades to achieve a 2% inflation target. The core CPI had a increase of only 0.5% in December. The latest CPI figures will be released on Friday.
The article talks about how the Japanese common man is worried about the rising prices and inflation. Super market prices have gone up by a massive 34% in 6 months. The Yen has been devalued by 27% since April 2013.
However, facts show that there is not much inflation in Japan. Japan has been combating deflation for decades to achieve a 2% inflation target. The core CPI had a increase of only 0.5% in December. The latest CPI figures will be released on Friday.
4 comments:
Haris, this is a very interesting article. The fear throughout the Japanese economy does not appear to be merited. It will be intriguing to follow some of the Japanese exporting firms throughout the next year due to the exchange rate. I have read reports saying that Kubota stock could raise by 30% this year due to this favorable environment.
It's interesting to see how the views of consumers, do not often line up with the data in an economy. And honestly, Japan could probably use a bit more inflation, at least until the central bank's target is met.
Although, if Japanese consumers have significant fear of a rise in prices in the future, they may increase their spending now, which could give a boost to aggregate demand in the economy and create something of a self fulfilling prophecy by raising inflation. Although, it's quite possible that this would be a good thing.
I agree with Arjun, Japan needs some inflation. Prices have been low for so long the slight increase has created fear in Japanese consumers. Japan's economy will definitely benefit from this inflation as long as it doesn't raise too fast.
I think this is a shock to the consumer because the tax was raised last year and now the prices go up too. However, Japanese economy do need this boost especially since the olympic is coming soon.
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