Japan cabinet office stresses importance of avoiding relapse into deflation Japan’s Cabinet Office emphasized, at a meeting of the government’s economic council, the need for stability and sustainability in these positive signs to ensure that Japan does not fall back into a deflationary spiral. They stated, “While there have been some positive signs in recent data, we must ensure they are stable and sustainable so that Japan won’t revert to deflation.”
In a separate discussion involving academics and private-sector experts, some participants called for BoJ to end quantitative easing once inflation stabilizes around its 2% target. Meanwhile, some participants suggested BoJ should mull over altering its extraordinary stimulus measures if inflation and wages continue their upward trajectory.
Prime Minister Fumio Kishida emphasized the need for a coordinated approach between the government and the BoJ amidst the growing uncertainty surrounding the economic outlook. He said, “We’re aiming to pull Japan out of deflation and achieve sustained, private demand-driven economic growth” by influencing public perceptions that growth and inflation will continue to rise.
