Japan's Abe: end of deflation
Prime Minister Shinzo Abe said deflation has ended in Japan and will be wiped away by new government policies designed to encourage business expansion. His ruling party will seek to pass a law in the next session of parliament to legalize casinos as part of a plan to boost tourism before the Tokyo Olympics in 2020, the premier said in an Bloomberg interview yesterday.
“Through bold monetary policy, flexible fiscal policy and the growth strategy we have reached a stage where there is no deflation,” Abe said in the interview yesterday. "With the first sales tax rise since 1997 that took effect in April, this was an extremely difficult time for management of the economy, but I believe we were somehow able to overcome it.”
Despite the BOJ's optimism, most economists still believe it will need to ease policy again this year, supposedly in December. Nevertheless, the yen (JPY) looks strong unless the regulator steps in with the new easing measures.