Inflation in core markets passed inflection points

The signs in recent months that inflation trends in core economies have passed inflection points are signals for recovering growth . 

Inflation in the euro area has surprised on the upside, reducing the fear that the economy could descend into a deflationary spiral. 

The stabilization in oil prices and other volatile components have helped and could prove temporary.

However, falling unemployment rates and rising wages in an environment of very accommodative financial conditions and domestic demand-driven growth suggest that therisks of deflation seem limited. 

Inflation developments in Japan remain less clear, complicated also by last year's VAT hikes. However, households' inflation expectations have been rising and wages have accelerated in response to robust corporate profits and tightening labour market conditions.