[hn_throwaway_99]

As someone who hasn't followed this closely, when/why did things switch? Japan had the opposite deflation problem for years (decades?) and IIRC tried battling that with "money printer go brrrr" for a long time. How did inflation become their primary problem?

[refulgentis]

- External sources of inflation: COVID global inflation raises price of imports, same with Russia v. Ukraine global inflation.

- Post a few up is way too aggressive about completely dismissing Iran conflict inflation/gas. It matters, big time, and specifically for Japan, it's a 3rd thing to add to above external sources of inflation.

- They held interest rates while ex. US hiked them, also making currency less valuable. (intentionally, and a good idea)

FWIW this isn't necessarily a bad thing, for Japan. It broke the dam of stagnation.

It is more unusual that the US did this than that Japan's currency depreciated.

My $0.02: the backstory starts with the bonds boys not liking the new fed chair. Long term USD interest rates spiked big time this week, after his press conference, not after the announcing they weren't hiking rates.

If they allow another spike due to dread of Japan dumping Treasuries, you might suddenly have a crisis

(your source: 38 yo, BA in economics @ 22, who kept up with economics nerdery along the years)

[marcosdumay]

My understanding is that Japan experienced the same kind of phenomenon that is unwinding in the US right now.

As long as your markets and tax policy are vicious enough that lots of normal people can barely make ends meet, you can print as much money as you want and it won't show up on the CPI. Instead, if you funnel that money to rich people, it will show entirely as growth in the price of investment instruments.

At the same time, you will have great economical indicators, and even large taxes that can be spent on anything that doesn't end up on the population's bank accounts (like on infrastructure).

But that money keeps piling up on investment, making them more and more distant from normal cost of life expenses. As soon as any of it reaches normal people, the CPI explodes.