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Until now, Japan has been experiencing “cost-push” inflation as import prices surge. It’s now flirting with “demand-pull” inflation, too, if wages sprint ahead of productivity gains.
It’s what economists call “bad” inflation. Since the late 1990s, Japan had been trying to generate “demand pull” inflation driven by rising demand that fuels wage gains.
MUFG economist Jeff Ng said he expects core inflation to continue easing in the coming months even though price pressures may remain. "A slower economy may also dampen demand-pull inflation," Ng said.