Concerns Over Rate of Japan Inflation

Japan could already be exiting decades of growth-sapping deflation faster than thought thanks to food manufacturers launching a raft of new products, according to a new retail price index.

In spite of embarking on a massive two-year program of quantitative easing, Japan has yet to emerge from two decades of deflation, according to official government indices. Excluding the effects of last April’s sales tax hike, the nationwide consumer price index was edging above zero in February and had stopped rising for the first time since May 2013.

That may be because, according to Hitotsubashi University professor Naohito Abe, government number-crunchers have overlooked “shrinkfaltion”: Companies sneaking price increases past consumers by launching new products but putting less in the package.


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