A Study on Impact of Inflation on Financial Markets with Reference to India Vs Japan Markets

Abstract

Inflation is a major macroeconomic factor influencing financial-market performance through purchasing power, interest rates, investment returns, exchange rates, and investor confidence. This study examines the impact of inflation on financial markets by comparing India and Japan, whose inflation experiences differ considerably. India has generally experienced moderate inflation alongside stronger economic growth, whereas Japan has faced prolonged low inflation and deflation. The study evaluates effects on stock markets, bond markets, interest rates, exchange rates, investment behavior, monetary policy, and financial stability. Primary responses from 100 respondents and secondary information were analyzed using percentage analysis. The findings indicate substantial inflation-related effects overall.   Keywords: Inflation, Financial Markets, India, Japan, Investment, Monetary Policy