Japan: Deflationary forces continue to grip the world's third largest economy - BBH
|Research Team at BBH, suggests that the Bank of Japan learned last week that despite its unprecedented and aggressive easing policy, deflationary forces continue to grip the world's third largest economy.
Key Quotes
“The BOJ's core measure, which excludes fresh food fell for five months through July, and the minus 0.5% reading is the lowest in three years. This week's data is expected to show that while the labor market remains tight, consumption remains poor, and still contracting on a year-over-year basis.
Industrial production may have extended the June bounce (2.3% ), but not enough to prevent the year-over-year rate from moving deeper into negative territory. With weak domestic demand and falling exports, the risk is an increase in output builds inventories that have to be run down.”
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