Japan core consumer prices rise 2.8% to nearly 8-year high

The nationwide core consumer price index, which excludes 

core items....

Now we have inflation and everyone is paying out more and earning the same or less(due to inflation) then where are the positives?

I certainly did not buy a new fridge last week….

I presume that doesn’t include the 25% or more shrinkage in contents of packaged food, sold by the packet/bag/container (not sold by weight or per item) that more often than not has also had a price increase…

The BOJ said they would aim to get CPI to a “stable” 2.0%, but now here we are with CPI 40% above target at 2.8%, and seen to get worse.

Were I Finance Minister, I would be directing the BOJ to stop trying to create inflation, and indeed to eliminate it.

Stable prices means 0% inflation, like Japan used to have.

And, I would also chop government spending down to sustainable levels, and move to sell off whatever assets possible to reduce the massive burden of debt imposed upon the economy by predecessors.

It’s time to get Japan back into shape. Spending money like crazy for 2-3 decades just hasn’t produced desirable results.

The price of Consumer goods will continue to rise to the point that a day’s wage will be just enough to buy a meal for one person.

[5] And when he had opened the third seal, I heard the third beast say, Come and see. And I beheld, and lo a black horse; and he that sat on him had a pair of balances in his hand. [6] And I heard a voice in the midst of the four beasts say, A measure of wheat for a penny, and three measures of barley for a penny; and see thou hurt not the oil and the wine.

Somehow, magically, fresh food and fuel aren't considered 'core' items in Japan.

That's because people only eat tinned goods and pedal everywhere.

Somehow, magically, fresh food and fuel aren't considered 'core' items in Japan.

Same in most countries

Core isn't the real pain people feel. It is a government mandated adjustment which was originally intended to exclude more volatile items so month on month numbers didn't fluctuate wildly. now being misused to understate inflation.

Doesn't really matter anyway as Boj will carry on printing no matter what the numbers show - they have little choice,

Seems a bit hard to see this inflation continuing for a long time in Japan considering the extreme fall of real income. This is due not only to stagnant salaries but also falling pensions (beleive it or not down 0.4 this year!). Consumption will definitely fall and prices will have to adjust downward.

Regarding massive printing of money, this translates into higher inflation only if this money circulates. Little impact if the money is kept in bank accounts like now.

So I think (hope) that current inflation will not get entrenched like for ex in the US.

There you have real economic overheating but it will never happen here as long as income stagnates.

@fxgai

Who's got better control of yield curve Feds or BoJ? Think about how that's going to impact on business funding. Hint - Japan doesn't need an IRA.

Japan is the envy of the world right now, and it's not through luck.

Core isn't the real pain people feel. It is a government mandated adjustment which was originally intended to exclude more volatile items so month on month numbers didn't fluctuate wildly. now being misused to understate inflation.

There is nothing even a tiny bit deceptive or dishonest about this practice. Economists do this because food and fuel prices rise and fall in a predictable fashion depending on the season. Food is cheapest in the summer when fresh crops are being harvested and sent to market, and is most expensive in late winter to early spring when the last of last years harvest is being consumed. Fuel likewise has a seasonal price variance, most expensive in winter and late summer. Adding the price changes from food and fuel acts to hide what is going on in the economy as a whole because these price changes tend to be fairly large. Stripping those two commodities out of your inflation figures allows economists and policy makers to see what is really happening. The rationale is that everyone expects food and fuel prices to rise and fall cyclicly. Their changes do not give economists and policy makers any deep insight into larger trends. So take them out and see what the rest of the economy is doing. Does that make sense?

Seems a bit hard to see this inflation continuing for a long time in Japan considering the extreme fall of real income. This is due not only to stagnant salaries but also falling pensions (beleive it or not down 0.4 this year!). Consumption will definitely fall and prices will have to adjust downward.

Regarding massive printing of money, this translates into higher inflation only if this money circulates. Little impact if the money is kept in bank accounts like now.

You hit two nails with one swing of the hammer. The current bout of inflation is indeed temporary, caused not by printing money as many claim but by huge disruptions to global supply chains caused first by the Covid-19 pandemic followed immediately by the Russian invasion of Ukraine and subsequent economic sanctions imposed on Russia. No nation alone can do anything by way of monetary policy to stop this inflation. The cure is for global supply chains to adjust, and they are. Container rates are falling globally so much so that now shippers that couldn't buy new ships fast enough to meet demand are now looking at retiring container ships and scrapping them. More interest rate increases by central banks will only make things worse.

As for the effects of "quantitative easing", it has not contributed to inflation at all. The velocity of money, how often a Dollar, Yen or Euro changes hands has been falling for decades. This is not due to anything central banks are doing either. It is because firms are allowed to concentrate, allowing them to engage in a degree of monopoly pricing to the point where US based corporations are sitting on literally several trillion dollars in unspent cash balances. Money that should be circulating and creating economic activity is soaked up by big corporations that due to high degrees of market concentration do not face the kind of stiff competition that would force them to lower prices and increase their output. Instead they enjoy a degree of "monopoly rents" and that money is stashed away instead of circulating. If anything, unless anti trust laws are better enforced and these big oligopolies broken up, the long term trends not just for Japan but for the US and elsewhere are deflationary.