What lies behind the weak consumer prices in Japan are structural factors unique to the country, in addition to the slower recovery in demand compared with the United States and Europe, mainly for private consumption.
Unlike firms in the United States and other countries, Japanese firms continued to hoard their regular workers in particular even during the pandemic, while making use of such programs as employment adjustment subsidies. This suggests that they have the capacity to swiftly expand supply of products and services in response to a recovery in demand.