Why should success frighten?

It shouldn´t, but regarding economic policy you never know! Maybe others ‘root against’ because it would show how they failed!

The WSJ reports:

Japan’s rising inflation, as measured by consumer prices, may reduce the likelihood of immediate additional monetary easing steps by the Bank of Japan.

The core CPI, the central bank’s preferred price gauge, rose 1.3% in December, beating economists’ expectations for a second straight month. Core CPI strips out volatile fresh-food prices from the index.

Although the figure is still below the central bank’s 2% inflation target, it marked the fastest rise in over five years. It was also the same rate as the BOJ’s annual price forecast for the fiscal year starting April.

A few months ago, Takehiro Noguchi, a senior economist at Mizuho Research Institute, felt the BOJ might move as early as March this year to step up its easing measures to minimize the possible impact a sales tax hike coming in April could have on growth and prices.

But improving CPI data, coupled with a series of upbeat remarks by BOJ officials over the past few months, have made him change his mind.

I have no idea why Mr. Noguchi “found reason to change his mind”. I hope Abe and Kuroda don´t!

Given the deterioration in the external environment, I would think the BoJ should be ever more ‘vigilant’ on the attainment of its targets.

The results so far are encouraging:

Afraid of success

This other report, also from the WSJ, is encouraging:

Japan’s current economic recovery is different from any other period of expansion in recent years. Why? Because it’s being led by domestic demand.

Economists say that in the past, the world’s third-largest economy expanded when demand for Japanese products abroad grew, encouraging companies to produce more. That in turns lifted the overall economy, benefiting consumers.

One thought on “Why should success frighten?

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