REPRICING JAPAN

What happens when the world’s cheapest major developed economy decides it can no longer afford to be cheap?

I am writing this from Tokyo, and watching the Bank of Japan’s normalization cycle from here makes one thing obvious. The most important change under way is not the rate hike itself. It is price discovery.

For more than three decades Japan ran an economic regime built around one task: stopping deflation from becoming permanent.

The tools required for tha…