A note from Goldman Sachs Japan Chief Economist

  • Some in financial markets believe the Japanese government may soon declare deflation is beaten

Buts GS says such a claim is not likely soon

  • Says government looking at CPI, GDP deflator, output gap, and unit labor costs as metrics to judge when deflation has ended
  • Even when satisfied, the government will want to link declaration of the end to deflation with an important political event - a "golden opportunity to publicly promote the success of Abenomics"

And ...

  • "Even if the government were to declare an exit from deflation, we believe the BOJ would need to maintain its current easing policy over the long term, continuously chasing the 2% inflation target"

via Bloomberg