Something Is Afoot With Japan’s Economy

By: Anneken Tappe · November 13, 2023 · Reading Time: 2 minutes

Deflation’s Departure

While Americans are struggling with the pressure of persistently high inflation, price increases are more than welcome on the other side of the world.

For almost three decades, Japan has battled a stagnant economy, and consistent deflation, even coining its own economic term for it: Japanification. However, recent global upheaval, including the Russia-Ukraine war and pandemic-era supply chain disruptions, have shifted the tide.

Economic Evolution

In the early 1990s, Japan’s asset price bubble burst, and the country’s stock market crashed, leading to extensive fiscal stimulus, and looser monetary policy. The period that followed is also known as Japan’s “Lost Decade”.

Fast forward to today: Japan is experiencing moderate increases in the price of energy, and food, and as a knock-on, rising wages too. While its current 3% inflation rate might not sound like much to Americans who experienced a peak of more than 9% last year, it’s a big deal for a country that has only seen inflation top 4% just once in the past decades.

A Lesson to Learn

There are lessons to be learned from Japan’s economic idiosyncrasies, including this one: Although fueled by external shocks, Japan’s proactive approach, involving hundreds of billions of dollars in extra spending, has been instrumental in this turnaround.

Read more reporting here .

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

TLS 1.2 Encrypted
Equal Housing Lender