After Japan's inflation in January was stronger than expected, will Japan's long road to fight deflation finally come to a successful end? On Saturday, the media quoted people familiar with the matter as saying,The Japanese government is discussing officially declaring that the economy has overcome deflation.People familiar with the matter said the Japanese government will carefully study the results of this spring's labor negotiations (also known as the "Spring Fight") and the outlook for inflation to determine whether Japan has the conditions to declare a complete escape from deflation.
It is worth noting that this official statement, although symbolic,But it would mean that a major growth bottleneck for the Japanese economy has been removed.
Prime Minister Fumio Kishida or members of his cabinet may later make the announcement publicly at government meetings and press conferences, and mention it in the monthly economic report.
The market is concerned that once Japan announces that it has overcome deflation,The timing of the Bank of Japan’s next interest rate hike will be the focus, and this will be its first interest rate hike since 2007.
However, Bank of Japan Governor Kazuo Ueda recently "thrown cold water", saying that the inflation target has not yet been achieved, and the central bank will continue to confirm "whether a virtuous cycle between wages and prices has begun to form."
He also emphasized that he would pay attention to the results of the spring competition.This is expected to be key to confirming whether the economy is in a virtuous cycle. Ueda Kazuo said he has reason to believe that wage negotiations can achieve positive results.