5 December 2022 | Other

BOJ’s Wakatabe warns that the risk of “Japanification” hasn’t yet disappeared

Despite a rapid rise in inflation, Bank of Japan (BOJ) Deputy Governor Masazumi Wakatabe warned central banks about a continuing risk of so-called “Japanification”, or economic stagnation. 

Wakatabe is an active advocate of aggressive monetary policy easing. According to him, “Japanification” still endangers the global economy. A neutral interest rate, at which the monetary policy neither stimulates nor limits economic growth, might be affected by various factors. 

Japan’s economy has been in deflation for a long time. As Wakatabe stated, this experience has shown that it’s extremely difficult to get rid of the fear of economic stagnation.

In 2013, Japan’s central bank launched a massive program of purchasing assets in order to support the country's economy and beat deflation that lasted for nearly two decades. However, these measures didn’t help to bring inflation to the target level of 2%. As a consequence, the Bank of Japan switched to a negative interest rate policy in 2016.

In the current economic situation, the bank continues to adhere to this strategy, even though inflation has already exceeded the target level due to rising commodity prices. The bank's policy is mostly driven by its experience of economic stagnation.

Company MarketCheese
Period: 30.04.2025 Expectation: 12000 pips
ETHUSD set to test upper boundary of downtrend channel
Today at 11:30 AM 26
Period: 25.04.2025 Expectation: 500 pips
AUDUSD to fall to 0.63000
Today at 09:54 AM 14
Period: 28.04.2025 Expectation: 3100 pips
Buyers may retake initiative in USDJPY with target of 146.00
Today at 08:41 AM 14
Period: 02.05.2025 Expectation: 229 pips
Selling natural gas with target of 2.900 amid warm weather in US and Europe
Today at 07:01 AM 14
Period: 02.05.2025 Expectation: 1000 pips
Technical rebound of NVIDIA stock to result in pullback to 95
Yesterday at 11:27 AM 43
Gold sell
Period: 25.04.2025 Expectation: 7000 pips
Gold to correct to level of 3,250
Yesterday at 10:02 AM 102
Go to forecasts