WallStreetBlips - Latest Deflation News Articles

Battling deflation in Japan : Waking up to reality

Thu, 3 Dec 2009 10:55:30 +0000

The new government begins to get to grips with the ailing economy IN ITS few months in office there have been doubts about the seriousness of the new team running the world’s second-largest economy. Yukio Hatoyama, the prime minister, airily talks of healing Japan’s fiscal crisis with fraternal politics. He has appointed a blathering anti-capitalist to oversee the banks. And businessmen complain that they rarely have a chance to meet him or his ministers. In the past fortnight, however, Japan’s economic stewards appear to have woken up to the depth of the country’s malaise, and to the need for them to do something about it. Their focus has been deflation—consumer prices started falling in April. The concerns have been exacerbated by a surging yen, which on November 27th reached its strongest level against the dollar in 14 years. ... >

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Battling deflation in Japan: Feeling deflated

Tue, 1 Dec 2009 10:08:22 +0000

Japan’s central bank takes an overdue swipe at an old foe THE Bank of Japan (BoJ) must feel as if it has a bad case of deja vu. Three years after the central bank thought it had ended deflation, it has returned. And to fight it, the bank has had to resurrect a policy tool it tried to bury long ago—quantitative easing. If that is not bad enough, the BoJ once again has to deal with a government breathing hotly down its neck. The BoJ’s discomfort explains why, on Tuesday December 1st, it made what analysts considered to be a half-hearted attempt to reflate the Japanese economy and weaken the yen. What the bank did was better than nothing, but it did not go as far as some had hoped—nor as far as Japan needs. ... >

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Deflation in Japan: The curse of defeatism

Thu, 26 Nov 2009 11:40:32 +0000

Anybody who thinks deflation is no longer a threat should look at Japan and its flailing authorities JUDGING by the shrill comments from Wall Street, Japan’s biggest problem is its huge public-sector debt, which has grown to nearly twice the size of the country’s GDP. But it isn’t (see article). Far more pressing is deflation. On November 20th the new government of Yukio Hatoyama acknowledged what has been obvious for months: that prices are falling again after a three-year hiatus. This is worrying not just for Japan; countries such as America and Britain have more similarities with Japan than is commonly acknowledged (see article). Sadly neither the Hatoyama administration nor the central bank has shown any intention of tackling the latest incarnation of the deflationary curse. ... >

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