Japan Aims for Historic Economic Expansion Amid Inflation Concerns

Japan's economic expansion is on track to become its longest in post-war history, surpassing the 73-month 'Izanami' boom of 2002-2008. Preliminary government figures indicate that the current upswing has lasted for 74 months through July.

The economy has shown resilience despite stagnant household purchasing power and sluggish personal consumption growth. Average real-wage growth remained close to zero, but corporate earnings reached unprecedented levels due in part to the yen's steep depreciation.

Inflation, however, distinguished this period from previous long expansions. Consumer prices increased by an annual average of 2.1%, compared to 0.0% during the Izanami boom and 1.1% during the Abenomics-era expansion.

A senior Cabinet Office official noted that while the economy has 'almost levelled off,' it is not deteriorating. The challenge now lies in curbing inflation and stabilising the social security system to create an environment where people can use their money with peace of mind, according to Mitsubishi UFJ Research and Consulting's Shinichiro Kobayashi.