Japan has virtually given up on reaching 2% inflation after nearly six years of trying. An argument gaining ground in Tokyo holds that the inflation goal, once seen as paramount, doesn’t matter so much after all. Inflation excluding volatile fresh food and energy prices was just 0.3% in November, and it has barely budged all year.
Mr. Abe has largely stopped discussing the dangers of deflation, and his government is actually trying to push some prices down ahead of a tax increase set to take effect in October 2019. Mr. Abe’s de facto No. 2, Chief Cabinet Secretary Yoshihide Suga, has called on mobile-phone carriers to lower fees by about 40%—a move that could knock a full percentage point off inflation, according to government estimates.
“There is no change to our stance of seeking the 2% price goal as soon as possible by patiently continuing powerful easing,” Mr. Kuroda said at a November press conference. At the same time, he has started talking more about the potential downsides of aggressive monetary easing,
Still, BOJ officials are hesitant to abandon the target altogether out of fear it could damage expectations and push the country back into deflation, said people familiar with the BOJ’s thinking.
Torikizoku (Chicken Nobility), raised prices for the first time in 30 years last year, by the equivalent of 16 cents.
"Once prices went up, it wasn’t just the chickens that got skewered. Same-store sales at the chain have fallen more than 5% every month since May and profit fell 76% compared with a year earlier in the most recent quarter."
Abe now wants mobile-phone carriers to lower fees by about 40%, a move that could knock a full percentage point off inflation, so it can raise taxes.
The BOJ does not officially want to abandon its inflation target. And BOJ predecessor, Masaaki Shirakawa says “What is more important is…to aim for sustainable price stability in the medium to long term.”
Japan is the one nation that seems to have a modicum of price stability. It doesn't want it. Heck, it does not even seem to know it has some stability.
The Fed defines stability as prices forever rising.
This is all straight from the Twilight Zone.
I do suspect that at some point these sorts of financial shenanigans will "succeed" beyond Japan's wildest expectations with Japan intervening to stop massive inflation.
All it will take is an attitude changes that's arguably long overdue.
Mike "Mish" Shedlock