How Will BOJ Respond to Return of Deflation?
posted by Richard Katz on September 25, 2015
There is a second factor that has been very closely tied to inflation over the past decade: the ups and downs of the yen.
By one measure, deflation, like the swallows at Capistrano, has returned to Japan. According to the official target of the Bank of Japan (BOJ)—the consumer price index (CPI) except for fresh food—prices fell -0.1% in August from last year. This is the first time Japan has seen deflation since April 2013.