The Japanese government has a fake news problem, and it is impacting monetary policy at the Bank of Japan (BOJ).
Flying under the radar this week was the news that officials uncovered a data scandal that is forcing others to take another look at Abenomics.
The Ministry of Internal Affairs and Communications discovered that nearly half of the government’s economic statistics will be reviewed because 40 percent of 56 economic releases were either fake news or required corrections.
One example of this was the Labor Ministery’s Monthly Labor Survey, which was given a 0.7% nominal year-on-year boost in wages between 2012 and 20128.
It might seem benign, but the central bank relies on several economic data to determine monetary policy.
How is the BOJ reacting? A senior BOJ official noted that “there is no telling how far the impact has spread.” A spokesperson confirmed that “we intend to undertake a careful examination based on upcoming results of government studies.”
So, should anyone believe what’s coming out of Tokyo?
One of the biggest economic stories in Japan is the longest economic expansion phase since the end of the Second World War. Tokyo is poised for its 74th consecutive month of expansion amid a “moderate” recovery.
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