Apologies if this is in the wrong section.
I am just curious as to why the Japanese economy is plauged by deflation when to me, the fundamentals look sound (low unemployment, massive trade surpluss)?
I was also wondering whether an end is in sight, given that 2008 saw the highest inflation levels in 12 years and the YEN is currently strong with a fairly strong economy (3.5% ish growth during 2010). I can see that debt levels are very high, however is this the overiding factor?
Or another question is, can an economy be undervalued?
... and the ones that won't