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Friday, February 28, 2003

Meanwhile Back at the Coal Face

Whatever the merits or otherwise of new appointments, whether in the US or Japan, a reality check reveals one thing: things ain't gettin better, and fast.

The pernicious deflation that has plagued the Japanese economy showed no signs of alleviating in January while unemployment hit a postwar high, underlining the challenges facing Toshihiko Fukui, the newly-appointed Bank of Japan governor. Japan's jobless rate rose to 5.5 per cent in January while the core consumer price index tumbled 0.8 per cent from a year ago, its fortieth straight month of decline. Economists said deflation was likely to get worse before it got better, a result of the strengthening yen and "anaemic monetary stimulus". The yen recently rose to a six-month high against the dollar at Y117.Chris Walker, economist at Credit Suisse First Boston in Tokyo, said: "For the next few months, the most likely direction for CPI inflation is down, towards the record rate of minus 1 per cent, year-on-year.
Source: Financial Times

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