Japan considers declaring end to decades-long deflation

Japan is contemplating declaring an end to its longstanding deflation, as reported by Kyodo news agency, based on insights from informed sources. The decision hinges on the outcomes of the annual wage negotiations set for March 13, assessing their capacity to counteract recent price surges and future price trend projections. A declaration would mark Japan’s emancipation from over two decades of deflation, which has significantly hindered economic progress. Since 2001, Japan has battled to overcome a cycle of declining corporate profits, stagnant wages, and weak consumer spending. The government plans to evaluate a comprehensive set of indicators, including consumer prices, unit labour costs, the output gap, and the GDP deflator, to make a conclusive determination on deflation’s end.