What sounded like a statement of the obvious by Bank of Japan Gov. Kazuo Ueda last week ¡ª that a country where prices are rising by 2% is, in fact, experiencing inflation ¡ª has more to it than meets the eye.
The language suggests the time is approaching when the world¡¯s last surviving experiment in negative interest rates will be folded up.
By some measures, this isn¡¯t the most auspicious moment for Japan to be laying the foundation for a historic shift in policy. The economy is in recession and inflation is retreating nicely after a post-pandemic spike. The response from officials is less than textbook; they sound determined to increase interest rates in coming months, an event commonplace in most economies, but exceptional in Japan.
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