Japan

The Japanese economy has displayed impressive resilience in the face of global shocks and output is growing above potential. Domestic demand has been robust and unemployment remains low. After three decades of near-zero inflation, prices grew faster than the BOJ’s 2-percent target for over three and a half years before moderating in January. While nominal wages are rising at a historic pace, there are persistent concerns about the cost of living as high inflation erodes household purchasing power. Japan continues to face challenges from its aging population and high public debt.