Japan’s auto workers unions had agreed on slimmer pay raise of 3,000 yen, only half the amount they demanded last year. That would hinder Prime Minister Abe’s determination to put an end to the country’s economy stagnation by boosting domestic growth and reviving exports.
China faces risks of deflation, as manufacturers' selling prices fall for the 42nd consecutive month in August. The Producer Price Index (PPI) shed 5.9% from a year earlier, much worse than market expectations of a 5.5% decline.
The Swedish crown sank 1 percent on Thursday after Sweden's central bank surprised markets by cutting interest rates deeper into negative territory and saying it would pump more money into the economy, citing risks from Greece.
The European Central Bank must continue its asset-purchasing program to ensure that euro area inflation returns to target levels, despite signs that deflation fears have eased, ECB governing council member Ignazio Visco said on Tuesday.
A worldwide sell-off in government bonds deepened on Wednesday, with the rise in long-term borrowing costs to their highest level this year spreading unease across all assets and putting stock markets under pressure too.
The euro zone ended four months of deflation in April with consumer prices unchanged from year-ago levels, removing the threat of persistent price declines as energy costs pushed up in the month.
Whisper it, but the next challenge for financial markets and policymakers may not be deflation, but the remarkable surge in oil prices from the six-year low touched in January.
China's economy probably cooled further to grow 7 percent in the first three months of the year, a Reuters poll showed, which would be the weakest pace in six years and raise pressure on policymakers to do more to bolster growth.
Takahide Kiuchi often appears a lone voice of dissent on the Bank of Japan board as his proposals to change key elements of its massive monetary stimulus are consistently voted down, but two years into the policy he is looking increasingly prescient.
Japan's industrial output fell in February at the fastest pace in eight months due to declines in production of machinery, cars and electronics in a worrying sign that domestic demand could be faltering.
Japanese shipments of traditional flip-phones rose in 2014 for the first time in seven years while smartphone shipments fell, highlighting Japanese consumers' tenacious attachment to the familiar and typically less expensive older models.
China has not sunk into deflation and growth in its foreign direct investment will be stable for 2015, the spokesman for the Chinese trade ministry said on Monday.
Japan's government is likely to name academic Yutaka Harada, a proponent of aggressive steps to end deflation, to the central bank's policy board, the Nikkei newspaper said on Wednesday.
The Obama administration is asking Wall Street to explain why the yields investors are demanding to compensate them for inflation have dropped since August, the U.S. Treasury said on Friday.
Tumbling oil prices have strengthened rather than weakened the Federal Reserve's resolve to start raising interest rates around midyear even as volatile markets and a softening U.S. inflation outlook made investors push back the timing of the "liftoff."