Economics
Japan's Government Is Undermining its Own Efforts to Boost Inflation
- Many prices are government-linked and very slow to rise
- Energy is an inflation wildcard that keeps hurting the BOJ
Mount Fuji stands beyond the buildings of Tokyo, Japan.
Photographer: Akio Kon/BloombergThis article is for subscribers only.
The basket of goods and services that make up the Bank of Japan’s core inflation gauge is chock-full of items that it has little chance of influencing, undermining the effectiveness of monetary policy as debate rages over the BOJ’s 2 percent price target.
Japan relies heavily on imports for its energy requirements, leaving it highly exposed to swings in oil prices, which are a key driver of its core consumer price index.