JPY: Japan Considers Ending Deflation: Kyodo Report
According to Kyoda news Agency, Japanese Government is keen on End to Defaltion in Japan. This will be decided only after Wage Talks meeting on March 13. Whether Wage hike will offset the price hikes of Companies. The Bank of Japan is very much stubborn on Wage hike increased inflation rate, then only It will be healthier inflation rate in Economy.
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According to informed sources, Kyodo News reported on Monday that the Japanese government is considering officially declaring an end to deflation, highlighting increased concerns about potential policy tightening. The decision will depend on the strength of annual labor-management wage talks scheduled for March 13 and the outlook for price trends, the sources revealed.
JPY: Japan Gov’t Mulls Officially Ending Deflation: Media
According to Kyoda news Agency, Japanese Government is keen on End to Defaltion in Japan. This will be decided only after Wage Talks meeting on March 13. Whether Wage hike will offset the price hikes of Companies. The Bank of Japan is very much stubborn on Wage hike increased inflation rate, then only It will be healthier inflation rate in Economy.
The Japanese government is considering declaring an end to deflation, signaling a potential shift after nearly two decades of combating moderate price declines, as reported by local media on Saturday. Recent inflation and the possibility of sustained wage growth have raised hopes for breaking away from deflation. However, uncertainties persist, including a recent technical recession.
The government will assess the outcome of spring labor-management wage negotiations and the inflation outlook to determine if conditions are right for Japan to officially declare the end of deflation, according to sources cited by national news agency Kyodo. Prime Minister Fumio Kishida and cabinet members may make a public declaration, possibly in the government’s monthly economic report.
Japan’s economy has been stuck in a cycle where falling prices suppress corporate profits and hinder wage growth, leading to stagnation in private consumption. Despite ongoing efforts, caution remains due to doubts about the price outlook and broader economic stability.
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Kyodo reports that some officials see an official end to deflation as more of a formality, given Japan’s official stance that it is not currently in a deflationary state. However, many recognize the risk of economic conditions worsening after such an announcement.
JPY: Japan Government Considers Declaring Official End to Deflation: Sources
According to Kyoda news Agency, Japanese Government is keen on End to Defaltion in Japan. This will be decided only after Wage Talks meeting on March 13. Whether Wage hike will offset the price hikes of Companies. The Bank of Japan is very much stubborn on Wage hike increased inflation rate, then only It will be healthier inflation rate in Economy.
The Japanese government is considering officially ending deflation, sources familiar with the matter revealed on Saturday, marking a potential shift after two decades of acknowledging moderate price declines. Despite maintaining that the country is “not in a state of deflation,” recent inflation and the prospect of sustained wage growth are seen as paving the way for Japan to declare an end to its deflationary struggle.
The government will assess the outcome of spring labor-management wage negotiations and the inflation outlook to determine if conditions are right for a complete break with deflation. Japan has long been trapped in a cycle of falling prices impacting corporate profits and hindering wage growth, leading to stagnation in private consumption.
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A formal announcement, while symbolic, would signify the removal of a major growth bottleneck for Japan’s economy. Possible options include Prime Minister Fumio Kishida or Cabinet members making a public declaration, and the government issuing a statement in its monthly economic report.
Government officials emphasize that any decision will depend on economic performance, with Prime Minister Kishida expressing optimism about departing from deflation. However, caution prevails due to uncertainties over the price outlook and the unexpected technical recession in late 2023.
The Bank of Japan’s efforts over the past decade aimed at ending deflation have included unprecedented monetary easing steps, but there is speculation about potential changes, such as removing negative interest rates. Critical economic indicators, including the closing of Japan’s output gap, indicate positive developments for achieving stable inflation.
Despite positive signs, caution remains within the government, given uncertainty and the potential for economic conditions to worsen after declaring an end to deflation. Some officials view it as a formality and not a priority, given the official stance that Japan is not currently in a deflationary state.
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