Deflation unavoidable for Japan

Japan’s deflation is due to proximity to low cost Asian economies, the government’s chief cabinet secretary said yesterday. Yoshito Sengoku said that aggressive monetary and fiscal easing can fail to tackle falling prices, and risk “leaving a burden for the next generation.” However, the Bank of Japan is pursuing its asset buying scheme. The Bank announced that it would purchase exchange-traded funds (ETF) and Japanese real estate investment trusts (J-REIT) starting from today.