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Japanese government plans to declare end of deflation – Kyodo

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TOKYO: The Japanese government is considering declaring the end of deflation following rising prices, Kyodo news agency reported, citing sources familiar with the matter.

The government will make a decision after determining whether annual wage negotiations between unions and management, scheduled for March 13, will prove strong enough to offset rising prices and after reviewing the outlook for price developments.

If this comes to fruition, it will mean Japan will free itself from deflation that has dampened economic activity for more than two decades, the sources said.

The government has acknowledged that Japan’s economy was in deflation for the first time in 2001, with the country struggling for much of the past two decades to break a vicious cycle of falling corporate profits, lukewarm wages and weak economic growth. private consumption.

To judge the end of deflation, the government would look at a wide range of indicators, such as consumer prices, unit labor costs, the output gap and the GDP deflator, said Kyodo, citing sources.

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