Mar 19 (wsj.com) - While the U.S. battles its worst inflation in 40 years, there is still one country where prices aren’t rising as fast as the central bank would like and interest rates are stuck around zero.
It is Japan, where prices in February rose 0.9% from a year earlier and actually fell when volatile fresh food and energy prices were excluded, according to government figures released Friday. Hours later, the Bank of Japan responded by reaffirming its ultra-easy monetary policy.
The central bank’s governor, Haruhiko Kuroda, said inflation may temporarily reach the bank’s target of 2% later this year owing to higher global prices of commodities like oil. But “it doesn’t mean that we achieved our inflation target,” he said, adding that such inflation “does not suggest the need to change the current monetary policy.”
Japan presents a jarring picture when set against the U.S., where inflation hit a four-decade high of 7.9% in February, and the Federal Reserve is penciling in six more rate increases this year after carrying out its first in more than three years on Wednesday. Other central banks are acting similarly, with the Bank of England raising rates this week for the third consecutive meeting.
Some in Japan believe its inflation peace may soon be shattered.
McDonald’s Holdings Co. (Japan), which operates McDonald’s restaurants in Japan, raised the prices of hamburgers, cheeseburgers, Chicken McNuggets and some other items on Monday, citing higher costs of wheat, beef and energy. ...continue reading