Japan's factory output down 1% in November

A falling price spiral in Japan for years put consumers off buying in the hope of getting goods cheaper down the road, denting firms’ expansion and hiring plans. That has weighed on growth in the wider economy.

This has absolutely nothing to do with deflation in Japan. People don't buy because they are uncertain about the future, whether they will have a job tomorrow.

But the latest inflation number remains way below the Bank of Japan’s 2% target, as officials struggle to convince cautious firms to usher in big wage hikes to stir spending

Because, as we know, 75yo Tanaka shacho on 20mil yen (and the rest) a year could not give two you-know-whats about the younger workforce who are struggling to make ends meet on a barely-minimum wage. As long as the old boys club rules Japan, things will never change. In fact, things will only get worse. For decades to come.

A lackluster global economy, marked by the slowdown in China and weakness in emerging markets, is also posing challenges to the recovery.

emerging markets are doing exceptionally well, India's GDP has outperformed that of China and even Vietnam's GDP growth in 2015 highest in 5 years..

A falling price spiral in Japan for years put consumers off buying in the hope of getting goods cheaper down the road

I never read something so stupid to explain a current bad economy, consumer buy when they need or want and if it is true that you might delay for some special sales this whole idea that because goods will be more expensive then consumer will buy right now is so backward.... and what "falling price for years" are they talking about, are they living in alternate universe ?

Ever notice that it's never called an inflationary spiral?

After all, if people were always waiting for things to get cheaper, they would never buy, as they would always be waiting for things to get cheaper.

Exactly my thought ! Who the hell would refrain buying food, for example, thinking it will be cheaper in a month or 2 which in the case of Japan, anyway, will never happen as at best you could expect to see reduced size and quantity for the same price. If you have income to spare and you see a product you want with a good price tag.. bingo you buy it period. Provide people with more income (or reduce their tax burden which is something a govt can do), then install an ecosystem so corporation can provide product they want/need with a good price tag and economy will kick-off .

A falling price spiral in Japan for years put consumers off buying in the hope of getting goods cheaper down the road, denting firms’ expansion and hiring plans. That has weighed on growth in the wider economy.

Typical biased or lazy economic reporting that does not want to clearly identify the declining price of labour as a major contributing factor. The fact that wages have been stagnant or decreasing is what has been putting consumers off buying as well as putting off young people from getting married or young couples from having children at all or another child. This greatly hurts consumption.

1% might not seem like much! but this is worlds forth largest economy.

I agree. I've never thought the whole argument about waiting for things to get cheaper held water. After all, if people were always waiting for things to get cheaper, they would never buy, as they would always be waiting for things to get cheaper.

That's right - when your policies fail, just make up an imaginary villain like "deflation" (in Japan's case, the value of money is largely stable or ever so slightly increasing) and blame it for the economics ills that result.

What Japan's economy needs is revitalization, not the depreciating value of the domestic currency.

Still, things could be worse. Measured unemployment is quite low, and people do seem to be finding jobs. (Apparently some university grads are opting not to take jobs with a view to looking for better options next season.)

But I'm skeptical that the "tight" labour market is going to resulting in broadly increasing wages, in Japan's case. If they don't rise soon, the conclusion will be that something is broken. Time will tell.

Japan’s production overall is making “one step forward and one step back,” the ministry said in a statement.

No, ya think? No there's some real brilliant insight into the economy. No wonder it is stuck in neitral.

@Citizen2012

You are 100% incorrect. It is basic economic theory, pickup a textbook.