Economics

Deflation a Real Risk for Japan, Former BOJ Economy Chief Says

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By Toru Fujioka and Sumio Ito

April 3, 2020 at 7:58 AM UTC

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The coronavirus pandemic and plunging oil prices could pull Japan back down into deflation and the Bank of Japan is powerless to fight it, says its former chief economist.

“The BOJ must seriously consider the risk of a return to deflation,” Hideo Hayakawa, who ran the bank’s economic research from 2001 to 2007, said in an interview Friday. “Inflation can easily fall below zero with the impact of oil” and other things.