Why is Japan not raising rates?
Posted inQuestion about Japan

Why is Japan not raising rates?

This article discusses Japan's low interest rate policy and its effects on the Japanese economy and global markets. It explains how the Bank of Japan has kept interest rates at very low levels since 1999 in order to stimulate economic activity, as well as other policies such as quantitative easing, negative interest rate policies, and yield curve control that have been implemented to combat deflationary pressures. The article also looks at the impact of Abenomics on interest rates, including increased government spending and borrowing by households and businesses alike. Finally, it examines the limited demand for Japanese Government Bonds from foreign investors due to their relatively lower returns compared with other countries with higher yield curves.
Is inflation a problem in Japan?
Posted inQuestion about Japan

Is inflation a problem in Japan?

In Japan, inflation has been a major concern for many years. According to data from the Bank of Japan, consumer price inflation was 0.5% year-on-year in February 2021, down from 1% year-on-year in January 2021 and 1.6% year-on-year at its peak back in December 2019. This indicates that inflation remains relatively low compared to other countries such as the United States where consumer price inflation was 2% year-on-year at its peak back in December 2020 according to data from the US Bureau of Labor Statistics. The Japanese government has taken several steps over recent years designed to address both deflationary pressures stemming from global trade wars as well as weak domestic demand which have kept consumer price inflation low since 2018. These measures include increasing public spending via fiscal stimulus packages, cutting taxes, increasing liquidity injections into financial markets, expanding access to credit through loan programs, providing subsidies for businesses and encouraging investment into new technologies like artificial intelligence (AI).