Friday, September 27, 2013

Japan: Inflation rate and long term market growth.

Japan: Inflation rate and long term market growth.

First of all, what is the Inflation. Inflation is a raise in prices levels at all, services, consumption goods, or commodities.
In other words it is a reduction in purchasing power and that will reflect on exchange prices in the market “as higher is the inflation rate, as lower is the exchange price for direct currencies and higher for the indirect” and that is fact.

Note: Yen usually shown as indirect currency (Yen/ Dollar) and (Yen/ Euro)  

Consumer price inflation in Japan rose to an annual rate of 0.8 percent in September, its highest level in almost five years, as the effects of a weaker yen pushed up the cost of fuel and electricity especially during this time of its nuclear reactor shut time for maintenance from September 15, leaving Japan without atomic power for the first time since July 2012, and more dependent on imported fuel.
The headline figure is likely to be viewed with some satisfaction by policy makers trying to overturn more than a decade of deflation in Japan, which they claim has sapped companies’ willingness to invest while weighing on household consumption, and furniture at national level, and increase domestic export to expand in the second biggest economy and to create an attractive environment for foreign investments. At least that is what decision makers hope, after all that long deflation age.

Although inputs costs will get higher and wages rates too, decision makers still hope to work as planned.

Japanese national core report released today with higher inflation rate and consumption goods prices with rate of 0.8 percent, 0.1 percent higher than before which gave a push for the Yen in morning to hit 98.98 Yen/U.S Dollar, and 133.48 Yen/Euro.

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