Cheaper tomorrow? Bank of Japan battles entrenched 'deflation mindset'

Bank of Japan Governor Haruhiko Kuroda does not need to convince Japanese people like Kazue Shibata that deflation brings problems, but getting them to believe that higher prices will make things better is proving to be a harder sell. Shibata, 65, who runs a small dress shop in central Tokyo, worries the BOJ's mission to hit a 2-percent inflation target could end up driving business away unless people also have more money in their pockets. On Friday, Kuroda's BOJ doubled down on a high-stakes bet that the central bank can shake Japan's consumers from a defensive set of expectations hardened by a decade and a half of falling prices, lower incomes and stop-and-go growth. "It's important for the BOJ to strongly commit to achieving its price target to get that price target firmly embedded in people's mindset," Kuroda said at a news conference on Friday, after the BOJ stunned markets with an unexpected expansion of its monetary stimulus program.

via Business News http://ift.tt/1A1GaZD