Japan: Inflation is at a “turning point”, we must work closely with the BoJ

In its annual economic white paper released on Monday, the Japanese government claimed that “Japan has seen price and wage increases extend since spring 2022“, adding that “such changes suggest that the economy is reaching a tipping point in its 25-year battle against deflation“.

“We should not discount the fact that a window of opportunity to exit deflation may be opening as inflation picks up and public perception of persistently falling prices subsides,” the report showed.

In addition, he mentioned that “To determine the inflation trend, it is important to look at the prices of services, since they reflect domestic demand and wages more vividly than the prices of goods.“.

Finally, the report concluded that the government should work closely with the Bank of Japan (BoJ) to achieve sustained wage growth.

Source: Fx Street

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