Deflation is so entrenched that companies are exporting it.
Fast Retailing Co., Asia's biggest clothing chain, whose Uniqlo brand offers ¥790 fleece outfits, will open 44 stores overseas this fiscal year, compared with 36 in Japan. Aeon Co., which boosted sales with its low-cost Topvalu-brand products, plans to spend ¥207.5 billion over three years opening stores in China and Southeast Asia. Japan's biggest ¥100 chain, Daiso Industries Co., has outlets in over 20 countries.
Their advantage may be Japan's disadvantage. Prices as measured by the gross domestic product deflator have declined almost without interruption since 1994. That has muted the effect of falling wages and provides a cautionary tale for Federal Reserve Chairman Ben S. Bernanke, who has been lecturing on deflation's perils as a central banker since 2002.