What I Learned This Week

The long-awaited breakout of the Nikkei likely means deflation is dead in Japan (continued). Has global labor-supply-driven deflation run its course?

Although the 25-year high in the Nikkei index has garnered many headlines, it is not well known that Japanese real estate prices have grown at a 1% annualized rate nationally since 2012, and an even-higher 3% to 4% annualized rate in Tokyo, according to Shuhei Abe, founder and chief executive officer of Sparx Group, Japan’s largest hedge fund. Abe, who shares the same family name as the prime minister, continued: “[I]t means ¥15 trillion ($130 billion) in wealth has been given to the Japanese public annually in the past five years…This is the significance of Abenomics.” The Tokyo Stock Exchange TOPIX Real Estate Index (TPREAL Index, JPY 1,521), an important inflationary/deflationary metric…

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