Why Japan Experiences Deflation and How can it be solved
Aging population
Increasing proportion of the population is pensioners, and pensioners have less money to spend (this means their spending power is lower).
Shrinking Population
The population of Japan is shrinking, making the demand even lower.
Strict Immigration Policies
Inadequate number of foreigners receive a residence permit, so skilled foreign workers (most notably from China and southeastern Asia like Vietnam) aren’t allowed to work in Japan.
High Competition of Retailers
Retail stores (most notably large floor area discount and grocieries malls) constantly lowers their prices to increase their market share in the country, i.e.: consumers would buy products from them, not somewhere else.
Too Many Retailers in Japan
This goes hand in hand with the above, fierce competition reason. The Japanese retail market is too fractured and divided up.
International Trade
Japan should be more liberal in its trading policies. The country should allow more imports entering Japan.
Foreign Language
Japanese people should learn more foreign languages, primrily english, mandarin (Chinese), and Korean.
