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Japan is “no longer in a deflationary period”, said Prime Minister Shinzo Abe

  • Author:Memory
  • Source:www.diecastingpartsupplier.com
  • Release on:2016-01-12
Japan is “no longer in a deflationary period”, said Prime Minister Shinzo Abe in a New Year’s message that clashes with recent data showing inflation running close to zero.

Mr Abe’s remarks highlight his eagerness to produce results for the Japanese public, with his Abenomics stimulus now entering its fourth year and upper house elections due in the summer.

But by declaring Japan is on its way out of deflation Mr Abe risks making it harder to launch extra stimulus should the economy take a turn for the worse.

Pressed on his remarks, Mr Abe conceded “we have not completely got rid of deflation yet”, but said rising wages and a pick-up in investment meant such an escape was near.

“I think we are just one step before we can declare that we are out of deflation,” said the prime minister. “The Bank of Japan governor Mr [Haruhiko] Kuroda says he will do everything possible to achieve this.”

The most recent inflation numbers for November show a 0.3 per cent rise in overall prices compared with a year ago and a 0.9 per cent increase excluding volatile food and energy components.

reflects a shift towards inflation, but many analysts worry it is due to the one-off effects of a weaker yen, and the progress will peter out before reaching the Bank of Japan’s goal of 2 per cent.

“We will do whatever it takes, and we will reach our goal of 2 per cent inflation without fail,” said Mr Kuroda. The BoJ surprised some analysts by choosing not to ease further last autumn, in spite of a slide in business expectations of future inflation.