Updated: 27th March 2009, 0845 hrs
Japan precariously closer to deflation
Japanese inflation has stalled, putting the country on the brink of a widely expected return to deflation.
The country's Trade Ministry said today that prices in February, excluding food and energy, fell 0.1 percent, a second straight monthly decline.
Retail sales, meanwhile, declined 5.8 percent, worse than the 3 percent drop that economists predicted.
An unprecedented drop in exports is forcing companies to fire workers and cut wages, weakening household spending.
It’s also pushing the economy closer to its worst slump in the postwar era.
With the benchmark interest rate already at 0.1 percent, the Bank of Japan has little scope to stop prices from falling.
Deflation is a major concern in Japan.
During its last bout with sustained price declines that began a decade ago, bankruptcies surged and the jobless rate advanced to a postwar high.
Japan precariously closer to deflation
Japanese inflation has stalled, putting the country on the brink of a widely expected return to deflation.
The country's Trade Ministry said today that prices in February, excluding food and energy, fell 0.1 percent, a second straight monthly decline.
Retail sales, meanwhile, declined 5.8 percent, worse than the 3 percent drop that economists predicted.
An unprecedented drop in exports is forcing companies to fire workers and cut wages, weakening household spending.
It’s also pushing the economy closer to its worst slump in the postwar era.
With the benchmark interest rate already at 0.1 percent, the Bank of Japan has little scope to stop prices from falling.
Deflation is a major concern in Japan.
During its last bout with sustained price declines that began a decade ago, bankruptcies surged and the jobless rate advanced to a postwar high.
