Japan's unique inflation experience

Everyone is looking forward to when the Fed lowers interest rates in the US. Meanwhile in Japan, the question is, when will the BoJ RAISE rates???

Seeing as how I am in Japan, it only makes sense to dedicate a few shorter posts to the state of the Japanese economy.

Last week, Japan’s economy entered a ‘technical recession’ after GDP fell for the second consecutive quarter.¹

Source: FT

Compared to its rich brethren (i.e., fellow OECD countries), Japan has been a bit slower to recover from the pandemic (despite not suffering as dramatic a fall).

Source: OECD

Part of this slower recovery is due to structural problems in Japan, things like demographics and culture, which we will discuss in a subsequent post. Today though, Nuance Matters will examine a topic everyone reading this has some experience with.

Inflation and interest rates!