Consecutive gains of core prices provide strong evidence that Japan is finally shaking off a long bout of deflation. It won't be a surprise if the Bank of Japan makes a policy turn even before April.
Quotes about deflation (16 Quotes)
The market is very positive right now. We have strong earnings, lower oil prices, a weak yen and the Bank of Japan predicting deflation is at a near end. It's like the icing on the cake for the stock market.
I think this is a fundamental decline. Deflation is really the cause of this. Low interest rates and low inflation isn't the answer to supporting this market.
Unemployment is sky-rocketing; deflation is in our future for the first time since the Great Depression. I don't care whose fault it is, it's the truth.
Confidence over an end to deflation keeps luring investors to bank shares. Buying of steel stocks falls into the same kind of category, that is one where investors bet on the domestic demand.
Portfolio managers should answer the question regarding the potential for deflation by saying that we are already deflating.
The camp that argued deflation has been proven wrong, ... They (inflation-indexed bonds) provide a competitive return with less volatility ... We have been in a period of much reduced returns in stocks. Going forward I think equity returns on average would migrate more to 7 percent levels. This would be a conservative alternative.
It is hard to buy bonds when the central bank is getting more evidence to support their case for raising interest rates. Bond yields will rise to correspond with an end of deflation.
In Japan, the Bank of Japan is telling markets absolutely everything, leading short-term bond yields to rise to a level that threatens prospects for an accelerated end to deflation.
I won't say 'deflation,' but price paring was widespread. It reached far beyond manufacturing and agriculture.
Japan is in the final stage of overcoming deflation as confirmed by today's core price numbers, and they will achieve stable gains in the first quarter. The chance that the bank will take action in April is growing.
Despite the decline in headline producer price pressures, the risks of deflation have clearly vanished and signs of inflationary pressures have emerged. With the Fed holding real rates below zero, we expect producer prices to continue their upward trend in the months ahead.
However, in spite of the general perception that monetary policy should be conducted so as to avert deflation, a central bank cannot lower interest rates below the zero lower bound.
If you look at the segments of the economy where we do have deflation, particularly in the goods industry -- and particularly in durable goods, such as automobiles and heavy machinery -- that's where most of the layoffs have been concentrated, ... That's where you see the connection of disinflation to overall economic growth.
People were concerned that the market will start pricing in the argument that the central bank will raise interest rates to a neutral level since deflation in Japan has ended. Yields will have a bias to rise.
Everyone seems to love bank stocks at the moment. Land prices are finally turning around, and with deflation near an end, Japan's recovery is well in place.