• The Bank of Japan (BOJ) is set to evaluate and audit past policies implemented over the previous several decades.
• This review will examine the effectiveness of its monetary policies over the past few decades, as it has been trying to end deflation for almost two decades with little success – the economy has remained stagnant.
• Reasons behind Japan’s stagnant economy include an aging population, a decline in the workforce, lower productivity, a shrinking consumer base, and a high debt-to-GDP ratio.
Bank of Japan (BOJ) Will Reevaluate Policy to Fight Two Decades of Deflation
The Bank of Japan (BOJ) intends to evaluate and audit policies implemented over the previous several decades. According to reports from Sankei newspaper on April 23rd, BOJ will begin discussions at a two-day conference set for April 27th and 28th under newly-appointed governor Kazuo Ueda. The first meeting with the incoming governor will take place this week, and one of the topics up for discussion will be a long-term assessment in order to develop successful policies under Ueda.
Background of BOJ’s Policy Reviews
The Bank of Japan has struggled to achieve its inflation target for quite some time – since implementing zero interest rates in 1999, the central bank has loosened its stance significantly by introducing several unconventional monetary policies such as quantitative and qualitative monetary easing policy (QQE), which expanded in 2014 as well as negative interest rate policy in 2016. However, these measures have yet to achieve their intended results.
Reasons Behind Japan’s Stagnant Economy
Japan’s stagnating economy is mainly attributed to demographic reasons such as an aging population leading to a decline in workforce and lower productivity; further compounded by a shrinking consumer base due to high debt levels. Currently, Japan’s public debt is over 200% of its GDP resulting from government borrowing used for economic stimulus packages during times of low growth or recessionary periods throughout history.
Aim & Impact Of The BOJ’s Policy Review
To address these issues effectively moving forward, BOJ’s upcoming policy review aims at examining factors influencing outcome effectiveness behind its current policies as well as looking into alternative methods that could support growth initiatives going forward..
Conclusion
As one of Asia’s most influential economies facing prolonged stagnation despite numerous efforts by BOJ over two decades now – this policy review looks promising towards achieving tangible results while providing some much needed guidance upon completion given recent appointments within BOJ leadership positions.