Deflation in Japan and $9 Jeans

Despite some recent positive rumblings, the recession continues to be hard on the Japanese economy, pushing the unemployment rate here all the way up to 5.4%, very high by local standards. As I’ve written before, the two recessions Japan endured during its post-bubble “lost decade” have made the Japanese quite good at dealing with economic hard times, and it’s interesting to see how companies deftly switch gears, lowering prices and offering new and innovative products to attract customers. The latest product to make headlines is a $9 pair of jeans that mammoth department store chain Aeon is hawking, no doubt hoping to entice buyers curious about how good a pair of $9 jeans could actually be in order to get them into the store. Unfortunately all the price-slashing has raised the threat of deflation, and a benchmark that tracks wholesale prices fell 8.9% in the month of July alone.

Would you like a pair of $9 jeans? Some prices in Japan are falling fast.