Bank of Japan to cut forecast for economic, price growth: report

Abenomics at its best.

My mind still says 0% inflation is healthiest.

@ShonanBB - Your mind, and common sense!

So, they increase taxes without increasing salaries and expect spending to increase? What are they smoking down there in Kasumigaseki?

The Bank of Japan (BOJ) will this month cut its forecast for both economic growth and inflation amid a slowdown in the global economy and cheaper commodities, a leading newspaper said on Saturday.

Price you pay for not biting the bullet and doing what is needed to reform the domestic economy. Lowering the yen can only be expected to do so much.

BOJ policymakers will downgrade the forecast for economic growth to around one percent from 1.7 percent for the current fiscal year to March 2016, the daily said. It added that the following fiscal year’s growth estimate would also be lowered from 1.5 percent, but did not give details.

Wow, 1.0% growth in 2015, and less that 1.5% growth in 2016. Glad I'm not a victim of Abenomics.

My mind still says 0% inflation is healthiest.

But you don't deficit spend trillions of yen, which you have to borrow at interest, however low the rate is. Without a little inflation, the ability to "inflate away" some of the value of the debt, it makes borrowing and squandering more difficult.

Nikkei rally and strengthening yen on Monday! /sarc #monetarymagic

If you want to see some serious inflation, or erosion of your purchasing power, take a vacation in Hawaii and see how much the Yen can buy after you convert it to dollars.

The Bank of Japan (BOJ) will this month cut its forecast for both economic growth and inflation amid a slowdown in the global economy and cheaper commodities, a leading newspaper said on Saturday.

Rather than a slowdown in the global economy and cheaper commodities, economic growth in Japan is directly tied to the shrinking and aging population. As long as these trends persist, talk of growth is just pablum for the voting public.

economic growth in Japan is directly tied to the shrinking and aging population

Exactly. On a per capita basis the Japanese GDP numbers are better than those of European countries and pretty close to the US. Doesn't mean there aren't serious economic problems in Japan, or that those problems are not the cause of the demographic issues (now being duplicated in pretty much every other country by the way). Just means that whenever you see the usual "Japan is a basket case / needs reform" line trotted out, the writer / commentator is a clueless quack with no idea what he is talking about.

You need 1-2% inflation to deal with sticky wages and prices. Otherwise people get to stressed out and depressed.

Just means that whenever you see the usual "Japan is a basket case / needs reform" line trotted out, the writer / commentator is a clueless quack with no idea what he is talking about.

Guy, another foolish comment uttered from someone who clearly has no real concept of economics, just theory. The reality is that Japan is a "basket case/needs reform", and you would know that if you had even worked one day in a real job there. The reality, as opposed to the theory, is that Japan has one of, if not the most inefficient domestic economies of all the major eonomies. Which means that any gains possibly made by lowering the yen for the benefit of the export-focused companies, get immediately flushed won the toilet by the inability to turn those gains into more wide-spread benefits. Same with all the massive government spending you are so in love with -- just throwing good money after bad. And, things like the restrictive labor laws, make Japan's labor force highly inflexible -- a serious problem in a global economy.

On a per capita basis the Japanese GDP numbers are better than those of European countries and pretty close to the US.

Ignoring of course, as you often do, the most salient fact, which is that Japanese per capita GDP has grown, simply because the population is shrinking. Now that's something to cheer about, right?

take a vacation in Hawaii and see how much the Yen can buy after you convert it to dollars. as good as that may sound its not really good for the economy when Japanese tourist spent there money overseas, whats good is American tourist to Japan are up due to the cheap yen giving them better value for money, plus there dollars are going into the J economy. Lower yen will benifit Japan a lot more than a high one. dont expect the yen to rise anytime in the near future

@WTF if devaluing one's currency could make that country wealthy, simply by printing up more money out of thin air, you would see Zimbabwe as the richest country in the world, where a can of coke sold for over $1 billion Zimbabwe dollars. You forget that the global monetary system was taken off a gold standard in 1971 when Nixon closed the gold window, which allowed the US to print as much money as it wanted. Because the dollar was the world's reserve currency after WWII, every other currency was linked to the dollar at a fixed exchange rate because the dollar was fixed to gold at a fixed exchange rate. The global monetary system is now on the brink of collapse as central banks have more than $200 trillion in debt and world GDP is less than $59 trillion. More tourists coming to Japan, and purchasing resources on the cheap, only makes Japanese citizens worse off. In fact a latest poll found that over 64% of Japanese are having financial hardship.

Guy, another foolish comment uttered from someone who clearly has no real concept of economics, just theory

As expected, jerseyboy has turned up right on cue to prove my point. All the usual dog whistle talking points about "restrictive labor markets", "massive government spending", and "inefficient domestic economy". The usual unsubstantiated claims that Japan's economic problems are country specific and not what they actually are, the effects of the breakdown of the global economic "system" (which simply showed up in Japan first). Never been demonstrated how these any of these "problems" (which existed long before stagnation ever set in) have caused stagnation, or how fixing these "problems" will magically bring economic growth. But who needs to actually understand how the world really works when you've looked at some nice straight lines in some economic textbooks and can spout the mantras and cliches.

It was understandable for people to pump out such nonsense 15 years ago, before the same issues caused by bubble economics and fake debt-expansion "economic growth" showed up everywhere, but it is a joke to still be pumping it out now.

The notion that because Japan's population is shrinking it cannot have economic growth is both defeatist and completely wrong.

Positive population growth is generally a tailwind for economic growth, but it is not a necessary condition for it. Conversely, a shrinking population makes it harder to grow, but it does not mean that there can not be growth.

Japan's biggest problems have more to do with the conservative vested interests digging in their heels in, and resisting the inevitable ticking of time and constant need to adapt and innovate in response to change.

The notion that because Japan's population is shrinking it cannot have economic growth is both defeatist and completely wrong.

Growth is possible with a shrinking economy and a declining population, provided that the government is fiscally responsible, and the private sector is innovative and dynamic. But none of these traits apply to Japan, and so long as they don't, growth is not possible.