Rising borrowing costs in Japan suggest era of deflation may be ending

Japan’s borrowing costs rose to their highest level in 14 years as economists say decades of deflation may finally be ending.

Although most countries have in recent years struggled to contain rising prices, Japan has faced deflation — whereby consumers hold off on purchases on the expectation that prices will fall in the future — for much of the past two decades, leading to economic stagnation.

However growth has been boosted recently by the country’s tech industry and a sharp rise in international tourism. In a sign of the shift away from deflation, Tokyo’s metro fares rose for the first time in 28 years. Japan’s “inflation is for real this time,” an expert told the Financial Times.