The backdrop to the wild drama in financial markets over the past few weeks is a less dramatic but more daunting reality: the deep-seated challenges for sustaining long-term growth, especially for aging economies like Japan’s.
Japan released data Friday showing its economy has yet to escape the doldrums more than two years after Prime Minister Shinzo Abe launched an unprecedented effort to jolt the country out of its deflationary rut. Core inflation excluding volatile food prices flat-lined at its lowest level in more than two years in July and household spending also slowed, the government reported.
Unemployment edged down to 3.3 percent and household incomes rose 5.4 percent in real terms, thanks largely to semi-annual bonus payments. Such trends are leading economists for forecast the economy will return to expansion after a 1.6 percent contraction in annual terms in April-June.