Poll: Will Masaaki Shirakawa Succeed in Overcoming Persistent Deflation by Engineering Mild Inflation?
In a poll conducted earlier this week in the CFA Institute Financial NewsBrief, we asked professional investors whether the Bank of Japan can overcome persistent deflation by engineering mild inflation.
Bank of Japan Governor Masaaki Shirakawa recently reaffirmed his position that the central bank will pursue monetary easing until the inflation target of 1% is achieved. Like many things in the world of investing, an established reality — in this case, more than 20 years of deflation in Japan — is not easily altered. This week’s survey results reveal that about 63% of 593 respondents think Shirakawa will not succeed in overcoming Japan’s ongoing deflation. To compound matters, Japan’s current-account surplus has been shrinking. If it turns negative, the Bank of Japan might have even bigger problems to battle.