Yes, The BOJ Strategies Have Not Worked Exactly As Planned. Economies Are Too Complex These Days.

https://www.yahoo.com/finance/news/majority-bojs-negative-rate-policy-051420818.html


Modern global economies, which Japan certainly is, do not, these days, respond to economic measures to improve the economy as before. Global economies have become much more complex than they were twenty or thirty years ago, or even ten years ago. The global economy has become much more interconnected, whether some like it or not, which possibly means to tried and true measures of central banks, don't always work in todays' global economic sphere.

The BOJ of course has been trying for years to stimulate inflation, to be more money moving through the economy for more economic activity, which usually means more demand for products and services. Perhaps it is time to rethink either the tools that central banks use to help and economy or accept the idea that the economy has reached a new paradigm shift and the idea of low inflation, might not be low inflation at all but the new normal for a mature but still growing economy.

Japan is a relatively very strong economy with strong economic fundamentals, with a stable government, and with still a large domestic population base.

Yes, as with every country, there are challenges to try and overcome. Maybe the BOJ will continue to work on the so-called low inflation, when in reality, just an idea, might not be major economic problem. Maybe its just what is normal now in Japan, and the BOJ and the government might need focus their resources on other more pressing issues at hand. Of course high debt to GPD, the low birthrate, the ever expanding aged society, and possible the need for more skilled immigrant labor, if there is a so-called labor shortage in Japan.

As with any country, no country is perfect the BOJ and the government can focus on many areas to improve society and the economy.

© 2020 Tom Metts,  all rights reserved