Lost & Found Decades Japan Past and Future

Abstract

Japan—After three decades dominated by stagnation, stock market has hit a record, and the final piece of its economic recovery is falling into place with the biggest pay increases since 1991. Japan presents a tricky case of inflation politics. The Nikkei Stock Average recently set a new high after 34 years, and the Bank of Japan is poised to end its eight-year experiment with negative interest rates, citing a healthier economy and inflation trends. Yet support for the government is plumbing new lows. Prices, big-company profits and corporate investment rose first. Pay increases lagged behind. Wages are stickier than profits, and economists going back to Keynes have argued that during good times, employers tend to wait as long as they can to pass on their prosperity.