Source: ForexYard
Although Japan’s preliminary gross domestic product (GDP) data for the second quarter of 2011 revealed mild contraction, its GDP Price Index underscored sharp declines in prices across the island economy. The data, presented in an annualized format, revealed a 2.2% reduction in prices from this time last year.
Used as a primary measure of inflation by the Bank of Japan (BOJ) the GDP Price Index is one of the broadest measures of the nation’s inflationary growth or contraction. This month’s report revealed significant contraction in inflationary growth, which may lead to a deflationary trap if measures are not taken. Traders will want to watch the BOJ in the coming days as strong moves should be expected.
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