Japanese Lessons

Japanese Lessons

With its central bank announcing a 2% inflation target, Japan is exciting again. But how can a 2% inflation target be big news? Because it's how Japan goes about achieving it where the interest lies.

Economic Analysis

31 January 2013

With 20 years of low inflation or even deflation, hitting a 2% target will be hard work. So if the Japanese authorities are serious, which they seem to be, they may be forced to use radical action - potentially employing methods far more drastic and aggressive than quantitative easing. For now, this remains a potential scenario. But if implemented and successful, then other central banks could follow Japan's lead.

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