My Short View on Japanese Deflation That Hits Record Today

I read news about Japanese consumer prices that fell at a record pace in December on BBC news , according to the latest official figures.

Prices fell by 1.2% in the month, I can see everywhere here, discount and bonus overwhelming on every store, BBC said that it is the biggest drop happened since 1970.

There is different argument between Japan's Finance Minister and Bank of Japan about the step with the government to fight this deflation.
Japan's finance minister has urged the Bank of Japan to move in step with the government to fight the problem of deflation. But the governor of the Bank of Japan, Masaaki Shirakawa, said his current strategy was appropriate for now.


I dont have idea about consumer price index, but all I can see here is every price of goods is falling down. Many discount everywhere, sugar, milk and others now more cheap than I have ever met.


I hear that Central Bank of Japan and Japan Parliament has called for cooperation by Japan's Prime Minister, Yukio Hatoyama to overcome falls in prices in this country.

"I expect the BOJ to support the economy by guiding monetary policy appropriately and flexibly, while keeping close contact with the government, in a way that is consistent with government efforts," he said.


Bad side of deflation is encourages people to keep their money for the sake of the value of their money. Peoples hope their money grow and delay their consumption because they expect the prices will falls more.
Moreover, manoeuvre concerning interest rates is difficult to do because Bank of Japan has hold their rates low for years.