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No Fairy Tale Ending in Sight for Japan
With a slew of recent data painting a rather bleak picture of the Japanese economy, ECRI has just updated its Japanese Future Inflation Gauge (JAFIG), which offers a different perspective on the outlook for Japanese inflation.
In another blow to Abenomics, year-over-year core consumer price inflation, free of the distortions induced by last year’s sales tax hike, slipped back to zero in its latest reading, way below the Bank of Japan’s (BoJ) two-percent target. In fact, this measure has fallen in eight out of the past nine months, which is far from the revival that was hoped for at the onset of Abenomics. Indeed, with BoJ governor Haruhiko Kuroda revealing that Peter Pan was his inspiration behind his QE, hopes for two percent inflation might continue to remain wishful thinking.
In our latest JAFIG update, we shed light on the future trajectory of Japanese inflation, providing valuable insight into Japan’s decades-long struggle against deflation.