Japan Is Caught Between the US, China and the War on Inflation
Trying to keep Washington and Beijing happy is making life more difficult for a government dealing with the novelty of fast-rising prices.
Buyers inspect tuna at Toyosu Market in Tokyo
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As the rest of the world raises interest rates to battle inflation, Japan curiously is clinging to low rates to raise wages and finally move past its long battle with deflation. But as Tokyo tries to hold the line, the fastest inflation in decades is spooking a country unaccustomed to it. Along with Russia’s war on Ukraine, the “decoupling” of China and the US is also raising tough questions for a historically pacifist nation. Japan’s biggest export market is China, but its national security has long depended on America.