Although Japan’s preliminary gross domestic product (GDP) data for the second quarter of 2011 revealed mild contraction, its GDP Price Index underscored sharp declines in prices across the island economy. The data, presented in an annualized format, revealed a 2.2% reduction in prices from this time last year.
Used as a primary measure of inflation by the Bank of Japan (BOJ) the GDP Price Index is one of the broadest measures of the nation’s inflationary growth or contraction. This month’s report revealed significant contraction in inflationary growth, which may lead to a deflationary trap if measures are not taken. Traders will want to watch the BOJ in the coming days as strong moves should be expected.
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Greg Holden is the Chief Market Analyst at ForexYard. Greg uses his detailed knowledge of fundamental and technical analysis to provide some of the leading market forecasts in the forex world today. A guest lecturer at forex symposiums and Chief Editor of ForexYard's analysis center, Greg brings highly detailed and easy-to-use market analyses to his clientele. He has been published on ForexYard's Trading Blog and affiliate websites. Greg holds degrees in Political Science and Economics from Missouri State University, as well as a Masters degree in Middle Eastern History.
