People walk along a street in Chinatown, Yokohama Prefecture, southern Tokyo.
Richard Brooks/AFP via Getty Images
After 25 years of craving for inflation, 125 million people in Japan have suffered from serious remorse from some buyers.
In January, prices rose at a year-on-year growth rate of 4%, which doubled the Bank of Japan’s target. This has caused investors to bet on additional interest rates to rise. and Tokyo lawmakers a step to limit household costs.
There are many ironies. Japan has finally made inflation policymakers chase after a quarter of a decade. The family is hating it.
Part of the problem is that much of the inflation Japan suffers from comes from abroad. It’s not Boj’s superhuman policy that won’t defeat inflation, but Vladimir Putin. Since 1999, the global impact of Russian leader Ukrainian invasion – soaring energy and food costs – the Japanese government cannot do it.
Of course, it was a year, and Japan became the first major economy ever to lower interest rates to zero. And, in fact, they are still nearby – only 0.5%.
However, the real-time trade war launched by U.S. President Donald Trump put Postal Governor Kazuo Ueda in an impossible position. The risk of continuing to raise interest rates increases Japan's way of changing.
These headwinds totaled to be a double blow. As Trump threatens a 25% tax on car imports, Tokyo realizes that the debris field will not just have much more tariffs on China.
Even if Trump has strong taxation business and family confidence, they will surely increase global inflationary pressures in Tokyo’s worst moments. Japan just leaves inflation behind. Is the next crisis in Tokyo stagnant?
Considering the latest vulnerability risks of the 13 governments mentioned are worth considering. With the approval ratings in the 1930s and the national elections scheduled for July, time is not on the Ishiba side to avoid Japan from the shock.
Ishiba's Liberal Democrats have been raising Japan's economic game for more than a decade. The government chooses to let zero interest rates and weak years do all the work.
That gambling made Japan uniquely vulnerable to global inflation and could avoid Trump 2.0's economic revenge journey. How will Tokyo deal with flat economic growth and higher consumer prices?
It caught up with Japan: the United States' miserable productivity. Of the 38 members of the Organization for Economic Cooperation and Development, the third largest economy ranked 29th in worker efficiency is disconnected. Worse, Ishiba is the latest leader with no plans to solve the problem.
It doesn't matter, how competition from China, India, South Korea and Southeast Asia accelerates the economic clock in Asia. Another problem is that Tokyo pushes companies to raise wages to initiate a benign cycle of increased demand.
Over the next two months, we will read about the burden of Shunto wage negotiations that occur every spring. Last year's talks ended with the biggest increase in 33 years (even if the average wage for inflation is adjusted to average wages, there is nowhere to go). However, an increase of another 5% this year may be a problem.
So far, Japan has been experiencing “cost volume” inflation as import prices rise. If wages were to rise before productivity rose, they were now flirting with inflation of “demand deduction”. Japan can certainly have its economic cake and it can be eaten. Tokyo only needs to break through a multidimensional bureaucratic matrix that might be designed by Mc Escher. Sadly, policy makers have hardly tried.
All of this slows down the economy, which brings an asterisk to the otherwise good news. GDP increased by 2.8% in the three months to December.
“The most important thing is that there is nothing to write about the fourth quarter GDP version,” said Stefan Angrick, an economist at Moody's Analytics. “The optimistic title character masks the domestic economy still woes.”
As Trump's escalating trade war grand slams, Tokyo's pre-existing conditions put it in a tough position. Ishiba is too busy trying to keep her job going to improve Japan's competitiveness.
“Consumption is weak because wage earnings lag behind inflation for most of the three years, and sticky inflation has pushed the growth of real wages far away. Policy uncertainty is an additional The issue. Fiscal and monetary policy is involving the rope between weak real growth and stubborn inflation. Given the worsening outlook for global trade, Japan will not be able to expect exports to slack in 2025.”
The common point between all these governments over the past 25 years is that people believe that time is on the side of Japan. However, the growing dominance in China and the Trump 2.0 White House has shocked the global economy, and there is actually nothing farther than that. The cost of decades from fullness can be stagnation.
