Foresight

Japan is struggling to break out of its deflationary cycle

While consumer prices rose by 2.8% in February, Japan is struggling to break out of its deflationary cycle.

On February 22, the Ministry of Internal Affairs and Communications announced that the consumer price index (2020 = 100) for February stood at 106.5, up 2.8% on the same period last year. At the same time, Japan experienced its first expansion in four months, with growth 0.8 points higher than in January.

The Bank of Japan has opted for large-scale monetary easing on the grounds that the goal of 2% price inflation is in sight, but the government has not yet declared the end of deflation.