Japan is in deflationary territory

Japan is in deflationary territory

Economists' forecast CPI to fall 0.1% y/y (excluding fresh food) to November, exactly in line with the actual figure. Abe has been very vocal about raising the BoJ's inflation target from 1% to 2%, a long way from current levels, and to get there the government is somewhat forcefully encouraging the BoJ to kick easing up a few gears, to go along with planned spending proposals. Overall, the prospect of more aggressive easing from the BoJ, be it through a new, more dovish BoJ chief or a complete rewriting of the Bank of Japan Act, has been the driving force behind recent yen weakness.