Consumer Prices Fall Sharply in Japan


30/11/2009 | 11:24pm GMT +5:30 | nvs

Financial Times reported today that the consumer prices continued to fall in September 2009. It adds that it signals building further pressure for the central bank ‘Bank of Japan’ to take action to curb the fall. Statistics Bureau of Japan is quoted as reporting core consumer prices excluding fresh food dropped 2.3 per cent last month from a year ago, slightly lower than the record 2.4 per cent fall in August. Comparing with the previous month August 2009 the decline in so-called “core-core” consumer prices, which exclude fresh food and energy prices, accelerated to 1 per cent in September, from 0.9 per cent in the previous month. It indicates that year-on-year change is in quite contradiction with month to month change. What does this mean? Does it indicates something or nothing? Can anybody explain?

Two important features of the report released by Statistics Bureau are:

  • Unemployment rate for September was 5.3% down from August’s 5.5%. The figure is also less than the economists’ forecast of 5.6%.
  • Industrial production rose for a 7th consecutive month in Sept. as demand from China and worldwide govts stimulus spending spurred exports.

There is one interesting fact that can be derived from the above news. Financial Times states that continuing fall of consumer prices builds pressure for the BoJ to take action to curb the fall. Declining consumer prices actually encourage consumer spending as the phenomenon is pro-consumers and hence pro-people. But it is equally fact that the same phenomenon is against to the interests of businesses, industries’ owners, and to the country’s economy itself. So those features which are pro-people are proved be anti-economy. This clearly states that the interests of the country’s economy are quite against to the interests of the common people. So the economy and the Government are not in the hands of people but in the hands of the big banks, industries, business houses and so on. But what for elections are conducted? Simple. To say that the country is actually democratic one. Hence present so called democracies are not actually democratic towards common people but towards upper strata of the society.

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