The Land of the Rising Sun is basking in the glory of its success. The Japanese will never stop defending their country from the economic and financial diseases. According to the official report of Japan’s Ministry of Economy, Trade and Industry, the country has exited deflation for now. The process of pushing prices down is over. Economic Minister Akira Amari said that the government managed to attain the goals it established, take the prices under control, and finally defeat decades-long deflation. The authorities realize that the deflation risk remains, so they will closely watch the wages growth in the country.
It is important that wages rise faster than the prices. Deflation is one of the reasons for the sluggish economic growth. Hence, Shinzo Abe empowered the government to deal with it. So, he introduced a package of emergency measures and long-term reforms including the lowering of the national currency. In December 2013, the yen hit a 7-year low; the currency lost 16 U.S. cents during the last year in a whole.
In addition, the Bank of Japan keeps buying the government bonds spending about $67 billion a month. Now, Japan is going to come face to face with inflation. The inflation limits are set at the level of 2%, which is twice as high last year. However, there is a flip side as well. Such a policy is boosting the government debt. Last August, for example, its amount was $10.46 trillion.
