Prior to the pandemic, Japan struggled to generate a sustainable inflation trend. The annualized rise in the price level as captured by PriceStats was only 0.4% YoY; a level low enough to be peppered with bouts of deflation. Since 2021, however, there has been a clear structural break: an inflation mindset has returned. The trend growth in the Japanese price level since this point has been comfortably above 2%, and if anything is showing signs of accelerating not fading. The implication is that Japan’s inflation trend has shown a lasting change, but monetary policy settings have barely moved from the deflationary era, yet. #STTInsights