But special factors, such as a reduction in fixed telephone fees, kept the growth down to 0.1 percent.
The importance of this spring labor offensive is not whether the increase was 2,000 yen or 500 yen, but that it breaks open a dam that will encourage future base salary increases.
Consecutive gains of core prices provide strong evidence that Japan is finally shaking off a long bout of deflation. It won't be a surprise if the Bank of Japan makes a policy turn even before April.
I think the biggest issue from this downgrade will be trust in Moody's as a ratings agency.
Mizuno's comments seem to be a message to the bond market that it should not be surprised by a rate move anytime.
We anticipate Japanese companies will try to compete in hiring good workers, driving up wages. Improving employment and rising wages will support demand, prop up economic growth and spur inflation.
The rises in import prices will likely speed up the process of companies' passing on such rises to domestic prices.
An economic improvement is spreading through all of Japan. We expect Japan's fourth quarter GDP to show a pretty good performance.
