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BOJ governor says it will be tough to meet inflation target


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Stand in your shoes Shirakawa-san. The key is reform, i.e. intrinsic (r-)evolution.

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Yeah I'm not going to buy a computer so I can read and comment on JT, because I know they will be more powerful and cheaper in the future....oh, hang on....

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Deflation is bad for the economy because it encourages consumers to put off spending in the belief their intended purchases will be cheaper in the future,

LOL! That's the biggest red herring out there. Deflation's been around for 20 years, and its psychological impact has long faded from the Japanese public's consciousness.

Anyway, much of our deflation is thanks to the cost-competitiveness China, which now makes most of our merchandise, and the high yen, which makes our imported goods -- like energy and food -- cheaper.

This pro-inflation policy is being pushed by the billionaires who want to hike our cost of living so that they can rake in more profits, which they'll then funnel toward China and the other emerging markets.

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Coffee at Starbucks, bread, fruit juice (in the 500ml cartons), newspapers (which I rarely buy), and taxi fares have all shown price increases since I have lived in Japan. Are they talking about land (asset) prices again?

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hogwash jefflee the reason for the deflation problem is not china or any other nation its because the lack of competition in japan and not opening its markets to the real money the j~gov can artificially keep the unemployment low however all japans private sector profit comes from abroad until these dinosaurs running this country man up and let the competition in it will always be a government stimulus economy paid for by the people who dont get it shoganai

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Government flim flam. Inflation is only good for debtors, as money decreases in value over time. It's also good for countries / companies that base their ENTIRE economic model on a certain exchange rate. Also, inflation is generated by printing money.

So by conning the public (and most economically illiterate journalists) that inflation is GOOD, the government kills three birds with one stone.

1) Easier to pay off it's massive debt

2) Underhanded way of getting more money to spend (Kind of like ancient Rome did when they debased their currency - leading to the collapse)

3) Purposely tweaking the exchange rate to benefit exporters at the expense of importers.

The common man on the street? Who cares about him. He doesn't matter to government folks. However, those pesky citizens DO have a say in the matter, as there won't be ANY inflation unless Taro and Sato start spending their money.

They'll only do that if they actually see stuff they feel like buying, and have some positive expectation about the future of Japan.

Of course, this isn't what Japanese government is after. That would actually require some intelligence, and a way of looking at the economy that would REALLY help.

No, their whole game is that by creating FEAR in people, namely that people will be FORCED to spend money before it loses it value, that will somehow help the economy.

Kind of like saying, "Hey, our house has some weaknesses around the foundation, let's LIGHT IT ON FIRE, that will help things out!"

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If my apaato rent was cut 40% I could start thinking about buying a second bicycle.

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Deflation (lower prices) makes us not buy?? Well then, I must not fit their model. I buy delivery pizza only when Dominos does a 1000 yen off deal. I shop at costco to save money on groceries. And you can bet that me and the rest of Japan fills up their tank on those days when gas falls suddenly.

As for big-ticket items, people will buy them when they feel their jobs are secure and the government is not at the edge of a GDP/dept nightmare situation like it is now -- this matters far more than a 1-2% change per year in prices do on consumer psychology.

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First, I would like to thank Gaijinfo for a good a very informative comment. Having said that, I would also like to add that I has never looked as if Mr.Sirakawa was going to be comfortable with being instructed what to do by a politician who admittedly knows less than him when it comes to managing certain aspects of the Japanese economy. It now transpires that Mr. Sirakawa has decided-- I think sensibly-- to reach a compromise with government demands and aim for a one per cent inflation rate short term. This does not make the problem of political interference go away, however. It would appear that the Bank of Japan had no intention, at least at the moment, to engage in a policy of quantitative easing that simply has momentary effects on the economy but does not necessarily encourage the average person to spend more. I said yesterday that Mr. Abe may just be right, however, if Japan's deficit begins to come down in due course once the effect of the devaluation of the yen starts having the desired effects. This is a political gamble for Mr. Abe which may just pay off. And this despite Germany's complaints about political interference in the management of the economy by not only the Japanese government but also their Hungarian counterparts as per current criticisms and counter criticisms in Davos. I predict that the number 13 in 2013 does not augur well for world economy this year. We'll see...

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Statistics of an economy are certainly vital to being informed and for making decisions in any government. To say that consumers will do this or that because of policy changes in the financial strategy of a government, i think is just for the most part silly.

In any country, I think the average working person pays little attention to the governments financial forecasting and policy changes. That the average working person's greater interest is in what their financial condition is and what they need this month or next month, purchase a car, refrigerator, washing machine etc.....

The financial condition Japan has been in for years has been addressed by many politicians and with little change to it. So, I think the average person will continue to make or not make purchases based on their own financial forecasting, paying little or even no attention to what policy changes are coming or not.

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2% inflational target is indeed not a huge number compared to other countries; however, it is the first step for Japan to get out of the deflationary trap. Japan is and will be screwed even more in the future if nothing change from the current situation. Be it for a better or worse, at least it is making a first step.

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also, BOJ is considered to be INCOMPETENCE in the last 2 decades. Chaiman Berneke once heavily critizied the BOJ for its uselessness in the 90's. Mr Shirakawa here also got voted as one of the top ten incompetence Central Bank Chairman with his handling of the current crisis. The FED is in tune with the US government, then why can't BOJ be in tune with its goverment?

This guy is just another typical J executive, too afraid to carry actual responsibilities.

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I am listing weblink on historical CPI and INFLATION rate of Japan for the comment listed above. Thanks.

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I think that if they flip flap then the desired effect ("oh no, there is going to be inflation so I'd better purchase now") is not going to work.

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