Thursday, March 01, 2007

Japan's Inflation Slows to Zero, May Turn Negative

Japan has always been an interesting story of economics. At least in my short lifetime. They continue to struggle to achive the kind of growth they had back in the 80s with the boom in the economy then and it doesn't appear that any respite is in the future. 7 years of slumping prices are still holding the prices down and diminishing growth.

Japan had zero inflation in January, underscoring the nation's struggle to overcome seven years of slumping prices.

Core consumer prices, which exclude fresh food, were unchanged from a year earlier, the statistics bureau said today in Tokyo, matching the median estimate of 39 economists. It's the first time prices failed to rise since May, and followed a 0.1 percent gain in December.

Wages fell the most in more than two years, a separate report showed, damping prospects for accelerating inflation and higher interest rates in the world's second-largest economy. The Bank of Japan raised rates for the second time in six years last week and Governor Toshihiko Fukui said further increases will be gradual.