The Japanese Statistics Bureau released its consumer price index (CPI) readings for Tokyo this morning, revealing an unexpected contraction in consumer prices. The news was not understood as negatively as in other places since a contraction was already expected, but the deeper downturn does raise a specter of tension in the island economy.
With the Bank of Japan’s (BOJ) recent forex intervention, the strength of the yen has been called into question and is being challenged on several fronts. The news that prices are in decline across Japan indicates that the value of domestic goods is falling as fewer people are buying, and the Japanese economy is coming under pressure as a result.
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