E Japan’s Economy Has Plateaued In Terms Of Growth And Inflation

Japan’s economy grew 1.1% year over year in the first quarter of 2018.

The economy is expected to expand only slightly more than 1% per year in both 2018 and 2019. In that sense, the economy seems to have plateaued.

In this uncertain international economic environment, Japan’s firms are facing labor shortages, which will provide some upward momentum to wages and prices.

While nominal wages have been rising in this slow growth era, real wages have been falling in Japan, which is partly due to Japan having achieved a positive inflation rate.

The Bank of Japan is expected to continue with its expansionary monetary policy until the 2% inflation target is achieved. In May, the inflation rate was only 0.6%.

 

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William K. 6 days ago Member's comment

I am realizing the government induced inflation is a direct attack on the value of my savings, and I am not happy about that. Yes, most of them are invested in an attempt to outrun the evil inflation monster. But it is clear that inflation is certainly NOT my friend.