I would like tentatively to share the insights of Mr. Hideo Tamura, Planning Committee Member, Japan Institute for National Fundamentals.
His theme is: Will Prime Minister Kishida Sink Japan into a ‘Deflationary Quagmire’ ?
The economic recovery from the Covid-19 recession combined with economic sanctions against oil-producing Russia for its invasion of Ukraine has caused soaring energy prices.
Globally, we are in an inflationary phase, but Japan is an exception.
On the contrary, prices are falling, and incomes are declining, resulting in a deepening deflationary recession.
Nevertheless, Fumio Kishida's administration has been dragged along by the balanced finance policy of the finance bureaucracy and has nominated a member of the Bank of Japan's advisory committee who is opposed to monetary easing.
●The Ministry of Finance's influence is immense.
Deflation refers to a continuous decline in prices, but the universal measure of inflation is called core consumer prices.
It reflects economic laws determined by the relationship between supply and demand, except for fresh food, which is affected by weather conditions, and energy, which is affected by fluctuations in international affairs.
Japan's core price inflation rate has remained below zero percent since August 2020.
