Good news: Japan inflation at 5 year high

A Japanese pedestrian passes before a share prices board in Tokyo on October 25, 2013. Japan's share prices dropped 398.22 points to close at 14,088.19 points at the Tokyo Stock Exchange, with exporter shares taking a hit from the rising yen as investors grew increasingly cautious by the end of the session.

Inflation in Japan is near a 5 year high -- up 0.7 percent. That's actually a positive headline for the world's third largest economy, which has been trying to climb out of a fifteen year hole of sputtering growth and deflated prices so low that they have hurt the country’s currency.

"Deflation, really, when it sets in for a long time -- like it has in Japan -- is a real problem because people stop buying and companies stop investing, because what's the point of investing in something that is going to be worth less tomorrow than it is today?" says the BBC's Rupert Wingfield-Hayes in Tokyo. "So, the government is trying to get some inflation back into the economy. It's the first time in 5 years we've that we've seen deflation stopping, and -- perhaps -- prices turning around."

About the author

Rupert Wingfield-Hayes is a reporter with the BBC based in Japan.


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