While Gov. Haruhiko Kuroda's vow to overshoot the Bank of Japan's 2 percent inflation target caused a stir among monetary policy watchers in September, it's yet to have an impact among retailers.
Stores as diverse as supermarket operator Aeon, Mister Donut and Wal-Mart have all announced price cuts since Kuroda's pledge, underscoring the weakness in Japanese consumer spending and the difficulty of overcoming the "deflationary mindset" that the BOJ set out to eradicate. Consumer prices fell for an eighth straight month in October, a government report showed Friday.
"Companies are just being practical," said Masamichi Adachi, a senior economist at JPMorgan Chase & Co. "No one is buying the BOJ's new commitment. There is strong doubt that the BOJ can even achieve the 2 percent target and the name 'overshooting commitment' itself is hard to understand for ordinary people."
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