Japan’s monetary policy in a challenging environment

Research output: Contribution to journalArticle

10 Citations (Scopus)


The Bank of Japan (BOJ) is attempting to overcome the mild deflation that has lasted in Japan for nearly 15 years and to achieve its 2 % price stability target. In the face of the zero lower bound on short-term interest rates, the BOJ introduced nonstandard monetary easing policy called quantitative and qualitative monetary easing (QQE) to achieve the target. So far, a number of positive outcomes have materialized. Compared with 2012, stock prices have been higher; private consumption is more resilient; more active real estate investment are taking place; and the yen’s exchange rate has been at more depreciated levels. Most importantly, the growth momentum of the economy is gaining traction and the unemployment rate is approaching the pre-crisis lowest level. There are some signs of the economy moving out of deflation although the BOJ needs some time to reach the 2 % target. This paper highlights the main features of QQE with conceptual explanations by reviewing the previous major monetary easing policies: quantitative monetary easing adopted in 2001–2006 and comprehensive monetary easing introduced in 2010 but was replaced with QQE in April 2013.

Original languageEnglish
Pages (from-to)3-24
Number of pages22
JournalEurasian Economic Review
Issue number1
Publication statusPublished - 2014 Jun 1
Externally publishedYes


  • Forward guidance
  • Japan
  • Quantitative and qualitative monetary easing
  • Signaling effect

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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