Japan is still struggling to generate inflation three years into its extraordinary policy assault on low growth and deflation.
Consumer prices remained flat in February, while annual inflation rose by 0.3pc – still a far cry from the Bank of Japan’s official 2pc inflation target. Core inflation – which excludes fresh food and energy – rose by 1.1pc last month, unchanged from February…..
…The Bank of Japan is purchasing 80 trillion yen in government bonds a year and has sent its main interest rate to -0.1pc to stimulate growth and lending in the world’s third largest economy….
…Negative rates have also failed to weak the yen which has risen by 7pc against the dollar since the negative rates move at the end of January. An appreciating currency further dampens inflationary pressures in an economy….
Monetarists say: central bank never fails to create inflation.
Guess what? CB of Japan has failed to create inflation 🙂