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Japan Diary


January 23, 2018

A warning about looming inflation in Japan

After the Lehman Brothers crisis Japan has been suffering a deflationary tendency.
However, one former central banker warns an inflation of 2% toward the end of 2018.
This is because exports go well and the labor market has become very tight.
Whether the inflation at this rate will work negatively or positively for the economy, one should further observe.
In any case it is striking that an ex central banker published such a bold view. You can see it at
https://www.omfif.org/analysis/commentary/2018/january/rising-japan-inflation-a-possible-shock/

Comment

Author: Tofa Tula | February 5, 2018 9:59 AM

The ever growing proportion of elderly people in Japan will be heavily hit by inflation. Since they do not want to (or cannot) depend on their children for support, chances are that they will increasingly hold onto their assets. Inflation will not change that trend. Why inflation is declared to be beneficial in a country with shrinking population is not cristal clear to everybody. Younger people who benefit from their parents pockets will propably see those sources of comfort dwindle and as a consequence themselves become more cautios in their spending.

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