“BOJ boosted lending programs while sticking with plan for unprecedented asset purchases – yen fell and Japanese stocks surged – moves underscored Kuroda’s stated commitment to do whatever is necessary to drag nation out of deflation. The BOJ doubled a funding tool to 7 trillion yen ($68 billion) and said individual banks could borrow twice as much low-interest money as previously under a second facility. It left unchanged a pledge to expand the monetary base by 60 trillion to 70 trillion yen per year.”
February 3, 2014:
Japan’s consumer price index, excluding volatile fresh food costs, increased by 1.3% in December, notching a 0.4% gain for 2013. That makes last year the first time in five years that average annual prices of consumer goods have risen. The bad news, while prices are going up, wages still aren’t. The aim was to convince businesses to pay their workers more. When inflation is taken into account, wages actually fell 1.7% in 2013 from the year before. As a result, average spending per household was also down 2.3% in real terms. Japan may be beating deflation but it’s losing the fight against falling wages.