Japan’s inflation hits 40-year high
Al JazeeraNov 26, 2022
The Facts
According to data released by Japan's internal affairs ministry on Friday, inflation hit a fresh four-decade high in November as prices rose at their fastest pace since 1981, partially driven by rising energy costs.
Japan's core consumer price index (CPI), which excludes volatile fresh food but includes energy costs, rose 3.7% in November from a year earlier, matching market forecasts.
The Spin
Establishment-critical narrative
After a decade of trying to generate inflation in an economy entrenched in price weakness, the BOJ seems unable to adapt to today's conditions. While Japan is experiencing a smaller scale of inflation than other nations, prices are still at a 40-year high. However, unlike those economies, its wages have remained virtually stagnant for the last three decades meaning its citizens are — literally — paying the price for Japan's failure to evolve.
Pro-establishment narrative
Japan's economy is a different beast than the rest of the world's and must be treated as such. From its rapidly aging and shrinking population decreasing demand to its decision not to shut down the economy during the pandemic, Japan was bound to be disinflationary. Its loose monetary policy — which kept many of its businesses afloat — has enabled the nation to bide its time as other economies panic. The BOJ will reassess as needed.
