Japanese inflation sped up in October but price rises are still less than half the central bank’s target, despite the tightest labor market in decades.
In the almost five years since Shinzo Abe returned to power promising an end to Japan’s deflationary malaise, the economy has returned to healthy growth but inflation has remained stubbornly below the target set by the Bank of Japan. One reason is that while the labor market is tighter than it has been in decades, that hasn’t translated into a strong rise in wages, meaning households have kept a tight rein on their spending.