My take on the Japan economy

First, it looks like the five months of 3% inflation was due to the anticipated and then actual consumption tax.  Otherwise, inflation has been in the 1-1.5 range since the crash. Yet the ten year yield on government bonds have been .5%. How in the world do they do consistently negative rates?  Central bank bond buying, evidently. Someone has to take the loss since the rest of the economy needs positive interest rates to support positive growth. And yes indeed the Japanese economy has been going in and out of recession for some time.  Likely Japanese oil importers pay a premium and business lending pays a premium.

Someone selling oil to Japan is going to notice that the Yen loses money over time, so eventually Japan pays a premium in price.

Here we see the price of oil in Yen (blue) and the price of oil in dollars (red).  The conversion factor was based on the Yen/Dollar exchange rate.  But the dollar is still king and the US is still the major Japanese market.  So what we see is what we expect, the real price of oil has been rising for Japan. The result is intermittent recessions in Japan.

So this is the symptom, what is the cause?  Likely the Japanese government is stuck with huge pension payments.

The idea that the government and central bank can fool traders by faking low rates is horse manure, it never happens.  If trade is happening then you can bet that someone is making an accurate yield curve.