Wednesday, November 5, 2008

Japanese Inflation Has Begun It's Steady Path Downwards, Economists Say

The Japanese core inflation fell and will continue to do so in the near future, that is what several economist think. Now the bank of Japan has to consider different measurements against the declining inflation by adapting their monetary policy. Several economists fear that the bank of Japan will cut rates now the inflation is stagnating.

Economist, Davy Cohen, said that the steady inflation is an effect of the falling energy prices all over the world.
Matt Robinson, an economist with Moody’s economy.com, agreed with that point of view and he even thinks that this is the beginning of a downward trend in national inflation.
On the other hand, Robinson says that core-core inflation, prices shed of both energy and food prices, are not about to go downwards. "This suggests the spike in food and energy prices may have already become entrenched in broader price pressures," he said.
This might be a reason for the bank of Japan to limit their enthusiasm to cut rates.

Davy Cohen, an other economist, disagrees. He thinks that the falling inflation will be seen as an opportunity to cut rate, what would not be very good for the economy of the country.

I think that the bank of Japan will be enthusiast to cut rates now the core inflation is stagnating, which I think is logical. But unfortunately that wouldn't be a good measurement for the people but I'm afraid that the bank Of Japan will cut rates.

source: http://www.actionforex.com/latest-news/asian-economy/japanese-inflation-has-begun-it%27s-steady-path-downwards

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