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No deflation in May in Japan


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No deflation in May in Japan

It seems the Bank of Japan’s stimulus measures have been having some effect as prices there stopped falling in May.

Core consumer prices, which include energy but not fresh food, were unchanged in May from a year earlier.

It was the first time in seven months that they have not gone down.

Falling prices have contributed to a stagnant economy as the Japanese put off buying things knowing they would be cheaper in the future. So called deflation has lasted for 15 years.

Other data just released signalled steady economic growth.

Demand for labour rose, along with industrial output, but household spending unexpectedly dipped.

The BOJ unleashed the world’s most intense burst of stimulus at the start of April, with promises to buy government debt and riskier assets to meet its pledge of achieving two percent inflation in roughly two years.

Many private sector economists believe the two-year target is overly ambitious. Even one member of the BOJ’s policy board has publicly called on the central bank to loosen this time frame.

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