Wednesday April 02, 2008

Japan core inflation rate hits 10-year high of 1.0% in Feb 2008

channelnewsasia.com :

Japan said Friday [28 Mar 2008] its unemployment rate rose for the first time in five months as core inflation hit the fastest pace in a decade, adding to concerns about the health of Asia's largest economy. Japan's core inflation rate meanwhile accelerated to a year-on-year rate of 1.0% in February, the quickest pace since March 1998, as rising energy and food costs drove up consumer prices, a separate report showed. Core inflation, which excludes volatile fresh food prices, picked up from a pace of 0.8% in January. It was the fifth straight monthly rise in core consumer prices.

The world's second-largest economy has struggled for the past decade to put a decisive end to deflation, which weighed on growth by undermining corporate profits and giving consumers an incentive to wait to spend their money. But analysts warn that the return of inflation is not altogether good news for Japan since it is largely due to soaring prices in oil, raw materials and food, making life tougher for companies and consumers.

- From an inflation blogger's point of view, if you were to put Zimbabwe with its record-breaking inflation at one end of an inflation continuum, then you would have to put Japan with its persistent deflation on the other end. But now Japan's deflation has reversed itself and has transformed into inflation. This is a big deal. The Japan case bears watching.

See also :

1. Japan shows first inflation signs as core CPI rises 0.1%
2. Japan inflation at fastest pace in more than 9 years

(2008-04-02 18:09:40 SGT) [Biz] Permalink

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