Inflation Comes to Japan

As I have suspected, inflation is coming to Japan.

April 11 (Bloomberg) -- Japan's wholesale prices rose at the fastest pace since 1981, pushed by higher fuel and food costs, highlighting concern inflation may accelerate even as the economy slows.

Producer prices climbed 3.9 percent in March from a year earlier, after a revised 3.6 percent increase in February, the Bank of Japan said in Tokyo today.

This is a trend to jump onto and which will continue. It is still in the infancy stage, but the pressure is building. When it becomes great enough, Japan will have to raise interest rates. The "quantitative easing" of earlier this decade is bearing fruit, and the fruit will be an uncontrollable price inflation. Remember, Japan must import almost all its energy supplies. The question is: How do I play this? I could buy the Yen against the dollar, hoping that speculators pile into the Yen if interest rates move up. However, holding Yen leaves me vulnerable to the currencies depreciation. Gold keeps looking better and better.