Japanese Inflation Falls by 0.5% in March as BoJ Stands Firm

Japan’s consumer price index fell by 0.5% in March, the government said. Prices have now declined for five consecutive months, underscoring the monumental task facing Governor Haruhiko Kuroda as he works to reverse 15 years of deflation.

Deflation, or falling prices, has a chilling effect on economic growth. It can encourage consumers to hold back on spending in the belief that prices will decline in the future.
In a bid to spark inflation, Kuroda is injecting money into the economy on a massive scale. Earlier this month, the central bank said it would start purchasing longer-term debt and securities like ETFs at an annual pace of 60 to 70 trillion yen.
The more assets the bank buys, the more yen it pushes into the economy. The point is to drive up annual inflation to a target of 2%.

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza