Japan inflation rate dips in 2012

Business Jan. 25, 2013 - 01:55PM JST ( 6 )

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

Order by Time Order by Popularity

6 Comments

1

DogJan. 25, 2013 - 11:17AM JST

The only inflation that Abe is going to create is in raw materials and perishables imported. We are in a canabalistic economy - Noriko Hama's term - where companies, to keep down their prices attractive to the bargain hunting obsessed Japanese shopper, will reduce wages. This in turn, will lead to a fall in consumer buying power, which will lead to lower prices, which will lead to........

This is total economic madness.

If Abe really wanted to create real inflation, he would introduce statutory annual pay rises for all workers' basic salaries of 5% for the next 5 years. Sure some jobs would go elsewhere in Asia, but are low paying jobs in Japan worth keeping?
0

marcelitoJan. 25, 2013 - 01:22PM JST

you are right Dog....Much better if they raise wages to drive spending and inflation up...could start by lifting the minimal wage to a decent level, say 1000 yen per hour....but they the little guy always comes last and the big corporations will always get preferential treatment...no surprises really, we`re talking about an LDP government here.
1

WakarimasenJan. 25, 2013 - 01:29PM JST

Shouldn't the headline be Japan's DEFLATION rate? THis attempt to get inflation up will result in the final implosion of the Japanese economy as JGB yields go up and govt. is unable to afford to finance its colossal debt.
0

globalwatcherJan. 25, 2013 - 01:54PM JST

It is very regrettable that Shirakawa is retiring from his post in March this year. He is a rock unlike 3 gangs; Abe, Aso and Nakao.

Abenomics will not work unless Japan(both Private Sector and Public Sector) seriously works together on economic reform.

In the 2000s and thereafter, the low growth of Japan was mainly attributed to changes in demographics by rapid population aging and population decline. This is where efficiency and productivity plays very critical role in labor economics that has to be improved or streamlined by technology or immigrant workers.

The decline in wage levels also contributed to deflation through a decline in the prices of goods and services which are labor intensive. While Japan was relatively low in unemployment compared to US and Europe as the wage level of Japan remained flexible and has been continue declining. When the labor force was losing purchasing power and the jobs are evaporating, the same labor force (consumers) stop spending.

BOJ did everything they could, but the sky has a limit because the LDP did not do anything to solve these problems during the lost decades as I listed above except pouring money for pork projects to nowhere. Now they are trying to correct their own mistakes they made in the past. Unless the LDP really focus on JOB, JOB, JOB with innovation for Domestic Consumer Spending model (manufacturing goods and service Japanese consumers need) instead of focusing on export driven economy, Japan will tank even deeper beyond repair. Keep it mind DEBT/GDP is currently at 214%. Shirakawa did all he could. The LDP should start taking responsibility for Japan's fate.

The 2% inflation target will not be attainable. The wage has to go up at the same time. It was once tried and failed at 1.37% with no wage hike right after the bubble bursted.
0

globalwatcherJan. 25, 2013 - 02:18PM JST

threatening to change a law mandating the bank’s independence if it does not fall into line.

This statement of the LDP alone today lowered the credit rating of Japan among global financial market. No very smart.
-1

viking68Jan. 25, 2013 - 04:53PM JST

Wait until the consumption tax increase starts increasing next year.

You'll see inflation then, even if you don't want it.