Let’s look now at Japan’s inflation, one of the prime factors that forced Japan to undertake unprecedented monetary policy measures.
Japan’s annual average CPI (Consumer Price Index) inflation, with 2010 as the base year, fell 0.7% in 2000. After no change in 2012, inflation crept up 0.4% in 2013 before surging 2.7% in 2014. For the first three months of 2015, CPI inflation averaged 2.3%.
The low rate of the rise in housing, transportation, and communication has led to a decreasing pace in inflation so far this year. Companies like NTT DoCoMo (DCM) and Nippon Telegraph and Telephone Corp (NTT) belong to the communications arena in Japan.
Inflation is still very low in Japan, considering the effects of a sales tax hike in 2014. In March 2015, Japan’s core CPI rose 2.2% from a year ago, excluding the effects of the consumption sales tax hike in April 2014. But its core CPI was up by only 0.2% from a flat reading in February.
This is key to the Japanese central bank, which will miss its target of 2% for the indicator this year. Consumption drops Japanese household spending tanked 10.6% in March 2015. This was worse than March 2011 when a huge earthquake and tsunami hit Japan. Spending has fallen since Japan increased the sales tax last year.
Low wages are also a problem. Japanese wages have sustained very low growth or no growth at all. In January 2014, the base pay in Japan increased for the first time in 22 months. Base pay has continued to rise very slowly in the low single digits.
However, in March 2015, Toyota (TM), Panasonic (PCRFY), Hitachi (HTHIY), and Nissan Motor (NSANY) announced the biggest increase in pay in more than ten years. In 2014, the rise in base pay was ~0.4%. Economists expect it to be closer to 1% in 2015.
For the Bank of Japan, a rise in wages is crucial to achieve its 2% inflation goal. A fall in crude oil prices (USO) has made it harder to achieve this objective.
http://finance.yahoo.com/
Japan’s annual average CPI (Consumer Price Index) inflation, with 2010 as the base year, fell 0.7% in 2000. After no change in 2012, inflation crept up 0.4% in 2013 before surging 2.7% in 2014. For the first three months of 2015, CPI inflation averaged 2.3%.
The low rate of the rise in housing, transportation, and communication has led to a decreasing pace in inflation so far this year. Companies like NTT DoCoMo (DCM) and Nippon Telegraph and Telephone Corp (NTT) belong to the communications arena in Japan.
Inflation is still very low in Japan, considering the effects of a sales tax hike in 2014. In March 2015, Japan’s core CPI rose 2.2% from a year ago, excluding the effects of the consumption sales tax hike in April 2014. But its core CPI was up by only 0.2% from a flat reading in February.
This is key to the Japanese central bank, which will miss its target of 2% for the indicator this year. Consumption drops Japanese household spending tanked 10.6% in March 2015. This was worse than March 2011 when a huge earthquake and tsunami hit Japan. Spending has fallen since Japan increased the sales tax last year.
Low wages are also a problem. Japanese wages have sustained very low growth or no growth at all. In January 2014, the base pay in Japan increased for the first time in 22 months. Base pay has continued to rise very slowly in the low single digits.
However, in March 2015, Toyota (TM), Panasonic (PCRFY), Hitachi (HTHIY), and Nissan Motor (NSANY) announced the biggest increase in pay in more than ten years. In 2014, the rise in base pay was ~0.4%. Economists expect it to be closer to 1% in 2015.
For the Bank of Japan, a rise in wages is crucial to achieve its 2% inflation goal. A fall in crude oil prices (USO) has made it harder to achieve this objective.
http://finance.yahoo.com/
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