Skip to main content

Return to growth belies headwinds to inflation

There are good reasons for the Bank of Japan to feel confident about the prospects of hitting its 2% inflation target. Economic activity is on the mend, the labour market is tight, and underlying inflation remains solid. But it is far too soon to sound the all-clear. Producer prices are falling again, wage growth remains anaemic, and longer-term inflation expectations have weakened. We still think that additional easing will eventually be needed.

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services


Get access