CENTRAL BANKING VOL. XVI. 3 (February 2006)., 1st February 2006
A end to deflation is in sight., but Japan’s monetary-policy makers still fear the dangers of a collapse of the yen and of the bond markets, says Andrew Smithers.
A fierce dispute is raging over Japanese monetary policy. There are good reasons for this, as odd features of Japan’s economy make it particularly vulnerable to both precipitate or delayed changes in policy. The dispute involves political issues as well as those of economic management. Many politicians and bureaucrats are keen that the bank of Japan should delay any monetary tightening for two reasons. The first is a fear that Japan’s economic recovery is far from firmly rooted and could easily become derailed. The second concern is the huge budget deficit.
https://www.centralbanking.com/central-banking-journal/feature/2068886/bank-japan-s-wire-act