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Japan's Property Market: The Lost Quarter Century
Seeking Alpha.Com / Mar 30.2009
Edward Hugh ( macro economist weblogs India Economy Blog, A Fistful of Euros, Global Economy Matters and Demography Matters.)

Despite the fact that Japanese Finance Minister Kaoru Yosano said Friday that February's fall in the so called "core-core" consumer price index doesn't mean Japan is back in deflation, few are ready to accept his judgement. Indeed, if you look at the core-core line in the chart below, it is at least debatable whether the Japanese economy was ever out of it in the first place.

The preoccupying inflation news came on the same day we learnt that retail sales had retreated in February by the biggest margin in seven years, as growing concerns about jobs and wages had an obvious impact on Japanese shopping habits. Retail sales were down 5.8 percent from a year earlier (to 9.98 billion yen) — the sharpest decline since February 2002. The figure marks the sixth straight month that sales have fallen at retail outlets like department stores and supermarkets.

And the reason why prices are falling, and workers are fearful for their jobs? Well just look at the export numbers: Japan’s exports plunged a record 49.4 percent in February as deepening recessions elsewhere hit demand for Japanese products. Shipments to the U.S., which is still Japan’s biggest market, tumbled an unprecedented 58.4 percent from a year earlier, with automobile exports were down a horrific 70.9 percent.