To achieve this, the key, in my view, is to tap potential demand, and both economic entities in the private sector and the authorities need to continue to make steady efforts to this end. The main cause of the current deflation is the negative output gap, which largely reflects a long-term downtrend in the economic growth rate since the 1990s.
However, looking again at major trends such as demographic developments and globalization, can we really say that Japan has nothing to gain from these trends? I do not think so. It all depends on one’s perspective.