Japan's policy makers, dogged for years by falling prices, had long yearned for a little bit of inflation. But now that the global tide of inflation has finally reached Japan, nobody is cheering.
The reason: Prices are rising for the wrong reasons. A little bit of inflation can be a sign of strong demand in a healthy economy; if consumers and businesses are prepared to pay more for goods and services, the providers of these can charge more, and prices rise.
But the price increases since last year are caused by higher prices of food, commodities and energy on global markets that are driving prices up world-wide. As the prices of imported materials are higher, manufacturers have to charge more for the products in order to make ends meet.
Read the report by Yuka Hayashi:
