29 The difference in labor practice is one factor behind the observation that deflation was the severest in Japan among major countries, but never turned into a deflationary spiral. Although ultimately labor practice is determined endogenously, we need to incorporate the differences in labor practice in analyzing the short- to medium-term developments in deflation.
Finance, which holds the key to strengthening growth potential  I have been mentioning repeatedly on various occasions the fundamental background to a declining trend in the growth potential of Japan’s economy. Put it simply, the economy has not sufficiently adapted to major changes of the demographic vortex and globalization.