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- Core CPI in Japan Worst Since 1981. Food Inflation Worst Since 1976, but Energy Prices Plunge.
Core CPI in Japan Worst Since 1981. Food Inflation Worst Since 1976, but Energy Prices Plunge.
by Wolf Richter Wolf Street
BOJ’s Ueda promises to fuel inflation further, hopes for wage growth. Clearly, the strategy is to let raging inflation bring Japan’s debt-to-GDP ratio back in line.
The Bank of Japan has been the total outlier in its reaction to the surge of inflation: It’s still practicing QE under the guise of yield curve control, which keeps the 10-year yield below 0.5%; and it’s still pushing its short-term yields below 0%. It’s clearly doing this on purpose, because these folks aren’t blind; they’re clearly going to resolve Japan’s sovereign debt problem, the biggest in the developed world, by fueling inflation to devalue that debt — along with everything else denominated in yen — the classic way. And it’s working.