Japanese inflation fell to 2% in January
o This is in CPI ex. Fresh Food which is Japan’s core consumer price index.
o Bank of Japan’s Target is 2.0%
• This is following inflation at 2.3% in December.
• Speculations of a rate hike in March/April
o Japan has had negative interest rates since 2016.
o Despite this, inflation has still been low or negative.
o Inflation is finally beginning to stabilize.
o Nikkei 225 reached a new record high.
o New figures may mean wages may finally see a rise.
o This means future outlooks are looking positive.
o We may finally see a positive interest rate.
• However, Japan is still in a technical recession.
• Wage rises may help increase growth.
• An interest rate hike may slow growth further as consumption
• Governor Kazuo Ueda says he wants to see signs of sustained price rises before moving on rates.