60 research outputs found
Japan's Deflation and the Bank of Japan's Experience with Non-traditional Monetary Policy
No full textThis paper offers a brief summary of non-traditional monetary policy measures adopted by the Bank of Japan (BOJ) during the last two decades, especially the period between 1998-2006, when the so-called Zero Interest Rate Policy (ZIRP) and Quantitative Easing (QE) were put in place. The paper begins with a typology of policies usable at low interest and inflation rates. They are: strategy (i), management of expectations about future policy rates; strategy (ii), targeted asset purchases; and strategy (iii), QE. Alternatively, QE may be decomposed into a pure attempt to inflate the central bank balance sheet, QE0, purchases of assets in dysfunctional markets, QE1 and purchases of assets to generate portfolio rebalancing, QE2. Strategy (ii), when non-sterilized, is either QE1 or QE2. Using this typology, I review the measures adopted by the BOJ and discuss evidence on the effectiveness of the measures. The broad conclusion is that strategies (i) and (ii) have affected interest rates, while no clear evidence exists so far of the effectiveness of strategy (iii), or QE0. Strategy (ii) has been effective especially in containing risk/liquidity premiums in dysfunctional money markets; that is, QE1 has been effective. The effectiveness of QE2, however, is unclear. The strategies, however, have failed to bring the economy out of the deflation trap so far. I discuss some possible reasons for this and also implications for the current U.S. situation.
Japanfs Deleveraging since the 1990s and the Bank of Japanfs Monetary Policy: Some Comparisons with the U.S. Experience since 2007
No full textThis paper discusses the backgrounds for the stagnant behavior of the Japanese economy during the last two decades and the failure of the Bank of Japan (BOJ) to turn the economy around. I argue that the policy authorities did not act quickly enough to mitigate the pain of the deleveraging process in the aftermath of the burst of land and stock price bubble in the early 1990s. Thus, the process became overly severe and protracted. The economy increasingly became vulnerable to negative external shocks and the decline in its population. Use of non-conventional monetary policy measures after deflationary expectations became entrenched substantially weakened their power to stimulate the economy. The U.S. economy since 2007 has exhibited many of the features seen for the Japanese economy during the last two decades; hence, the talk of the Japanization of the U.S. economy. There are, however, many dissimilarities as well as similarities between the two episodes. These are also discussed along with the analysis of Japanfs two lost decades.Popular discussions of Japanfs stagnation often focus on persistent deflation. Figure 1 shows core CPI inflation and a representative property price index for Japan and the U.S. since the peak of property prices, with the peak (T=0) assumed to be 1990 for Japan and 2006 for the U.S. In addition, it also plots investment in structures relative to GDP in Japan. Inflation in Japan has been in negative territory since 1998.1 There has been, however, no tendency for the deflation to accelerate. The cumulative decrease in the index since the late 1990s has been only about 5%. Thus, the classic debt-deflation type dynamic has not been a major cause of economic stagnation. In contrast, declines in property prices in Japan since the peak has been large and protracted-cumulating in a 60% decline at the time of writing. They led to significant deleveraging by financial institutions and non-financial corporations, which put downward pressure on aggregate demand for goods and services, especially, investment in structures, the component of aggregate demand most sensitive to property prices. The figure shows that its movements have been highly correlated with those of property prices.2 As may be seen from the figure, this component of aggregate demand alone subtracted about 0.4% per year from GDP growth during the 1990s. Such a negative feedback loop among asset prices, economic activity and, as we discuss below, financial instability has been the key feature of Japanfs stagnation. It is also interesting to note that both CPI inflation and property prices in the U.S. since the recent financial crisis have followed closely that of Japan in the 1990s, but inflation has so far avoided plunging into negative territory. Adjustment in asset prices and real investment were to some extent inevitable given the extent of the excesses created during the bubble period. The deleveraging process, however, became extremely protracted as a result of a forbearance game played by policymakers and financial institutions. Banks kept lending for a while to zombie companies in order to avoid recognition of losses on their balance sheets, and the authority stayed away for years from making the tough decision to recapitalize the banks. This resulted in a huge buildup of bad loans and eventually in a serious credit crunch in the late 1990s, which aggravated the declines in asset prices and deleveraging by banks and nonfinancial corporations. Banks increasingly became risk averse and stopped lending to risky, but promising projects. The economy slowly, but steadily lost momentum and could not grow out of the negative shocks generated by external financial crises in the late 1990s and 2000s, and the declines in its population that started in the 2000s. Deflation of the general price level did play a part in this process as well. It has hindered the effectiveness of monetary easing. This is ironic because monetary policy normally is a tool for avoiding deflation. Either the deleveraging forces outweighed the capacity of monetary policy to stimulate the economy or the BOJ easing came a bit too late. The BOJ tried to reverse the disinflation trend with fairly aggressive rate cuts - a conventional monetary policy tool-- and brought the policy rate to near zero by late 1995, effectively hitting the zero lower bound (ZLB) constraint on interest rates. Deflation, however, developed in response to economic weakness. The real interest rate has stayed at higher levels than desirable, and undermined the power of a zero interest rate to stimulate the economy, although it did not throw the economy into a deflationary spiral. Since the late 1990s, the BOJ has adopted a variety of non-conventional monetary policy measures. They have supported the financial system and prevented deflation from becoming worse, but have not turned the economy around. As I argue below, non-conventional measures work by reducing risk premiums and long-short interest rate spreads. The long period of economic stagnation had lowered these spreads to minimum levels and limited the effectiveness of such measures as was the case for conventional measures. In the following I will describe in more detail the deleveraging experience in Japan and then turn to discussing the experience of the BOJ to turn the economy around. Comparisons with the U.S. experience since 2007 are offered at each stage of the discussion
A study on the surface fluxes over a heterogeneous land cover
No full text筑波大学University of Tsukuba博士（理学）Doctor of Philosophy in ScienceThe author would like to thank professor Kazuo Kotoda, Institute of Geoscience, University of Tsukuba, for his guidance and encouragement during my graduate work. The author is grateful to Professor Isamu Kayane, Professor Shigemi Takayama, Dr. Tadashi Tanaka, ...1994doctoral thesi
2006) “The Bank of Japan’s Monetary Policy and Bank
No full textAbstract This short paper shows that under the Bank of Japan's Zero Interest Rate Policy and Quantitative Monetary Easing, not just the levels of money market rates but also the dispersion of rates across banks have fallen to near zero. Using the data on individual banks' Negotiable Certificate of Deposit rates, we first show that the dispersion of the rates among banks has fallen since 1999, the year of the adoption of the Zero Interest Rate Policy and reached almost zero by 2004. We next show that the fall in the dispersion of the rates is not explained by a corresponding fall in the dispersion of the credit ratings of the banks. Rather, credit risk premiums seem to have disappeared in the money market. We also discuss possible relationships between this result and the Bank of Japan's monetary policy
Influence of income difference on carbon and material footprints for critical metals: The case of Japanese households
No full textThis study simultaneously analyzed the carbon and material footprints for three critical metals (neodymium, cobalt, and platinum) in Japanese households with different income levels. These metals are critical for new energy technologies, such as electric vehicles and rechargeable batteries, and are thus central to carbon footprint reductions. The policy implications of the trade-offs between GHG mitigation and critical metal consumption are considered within the context of differences in income. A global link input-output model representing national and international supply chains was employed to quantify the footprints according to household income quintile.In addition, the square root scaling method was used to compare footprints among households, considering differences in household size and their footprint characteristics. It is found that the degree of similarity among the carbon and material footprints for the three target metals was not very high [Spearman's rank correlation coefficients between them were 0.34 (neodymium), 0.63 (cobalt), and 0.10 (platinum)], implying that differences in relative household demand should be carefully considered based on differences in target footprints. The results of this study were compared to a similar study conducted in the UK to identify similarities and differences among footprints. In both countries, the carbon footprint intensity of household expenditure decreases as household income increases. The findings of this study also revealed that, in contrast to the case of carbon footprints, the material footprint intensities of household expenditure rise as household income increases, particularly in the case of neodymium. Consequently, the implementation of subsidies aimed at reducing carbon footprints and stimulating the economy should carefully consider the concomitant increase in material footprints. Importantly, such considerations are not only applicable to developed countries, but also emerging countries, the living standards of which are expected to increase markedly in the near future
Policy Duration Effect under Zero Interest Rates: An Application of Wavelet Analysis
No full textA major feature of recent monetary policy in Japan has been heavy reliance on the so-called policy duration effect. This policy employs a commitment to compensate for the central bank’s inability to lower the interest rate below zero by altering the anticipated course of monetary policy actions. This paper analyzes the behavior of the yield curve and examines the effectiveness and limitations of monetary policy commitment under zero interest rates with four indicators for policy duration effect. Specifically, we extend our previous study (Okina and Shiratsuka (2003)) by applying wavelet analysis to indicators for policy duration effect. As in the previous study, the policy duration effect was found to be highly effective in stabilizing market expectations for the path of short-term interest rates, thereby reducing longer-term interest rates and flattening the yield curve. The policy duration effect, however, failed to reverse deflationary expectations in financial markets.zero interest rate policy, quantitative monetary easing, policy duration effects, policy commitment, wavelet analysis
Determinants of Open Attitudes towards Foreign Nationals in Japan
No full textWith a declining birth rate and an aging population, Japan needs to open the door to immigrants in order to maintain its workforce. Multicultural Coexistence or “tabunka-kyosei” in Japanese is commonly used to describe the relationship between Japanese people and foreign nationals in Japan. Unfortunately, the definition of this term is entirely unclear. This study defines Multicultural Coexistence based on two conceptions, “Willingness for Communication” and “Support or Opposition for the equality of rights.” The analyses are based on quantitative data; a sample of 1,823 Japanese persons and a second sample of 292 foreign national persons living in the industrial city of Tokyo (Hamura City). Analyzing the data, the author found that more than half of foreign nationals (65.9%) supported the most positive attitude “Integrated Coexistence.” Unlike them, however, only 19.7% of Japanese people supported it, and 33.8% of them supported “Exclusionary Coexistence.” Using multinomial logistic regression, the author found out that age, English speaking ability, neighborhood relationships, and interactions with foreign nationals were the determinants of orientations toward coexistence for Japanese people. From the results, the author suggests that neighborhood and multicultural networks are key to promoting a coexistent Japanese society
The Interaction of Bengali and Japanese Artistic Milieus in the First Half of the Twentieth Century (1901–1945) : Rabindranath Tagore, Arai Kanpō, and Nandalal Bose
No full textIn both India and Japan, the literature on twentieth-century art history has been elaborated within the framework of nation-building. Japan enjoyed independence during the first half of that century, while India endured colonial rule. However, the difference between polities did not prevent intellectuals from the two cultural spheres from engaging in intensive interactions. This essay focuses on Okakura Kakuzō (Tenshin), author of The Ideals of the East (1904), and the painters Yokoyama Taikan, Hishida Shunsō, and Arai Kanpō. Yokoyama and Hishida were invited to India through Okakura’s agency, and Yokoyama subsequently recommended Arai for an expedition to India. Exploring their deeds in this essay, the author seeks to shed new light on these figures’ relationships with Rabindranath Tagore, Abanindranath Tagore, and Nandalal Bose. Okakura and these Japanese painters provided technical and iconographic inspiration to Nandalal, and as they did so they were exposed to early twentieth-century India. Their engagement with modern India does not exclude ideological dimensions, and the author touches on those here, as well. Fitting into a project that has a reevaluation of Asian modernism as its ultimate objective, this essay locates these examples of mutual influence between Japan and Bengal within the larger context of Asian intellectual history in the first half of the twentieth century
Financial Markets Forecasts Revisited: Are they Rational, Herding or Bold?*
No full textWe test whether professional forecasters forecast rationally or behaviorally using a unique database, QSS Database, which is the monthly panel of forecasts on Japanese stock prices and bond yields. The estimation results show that (i) professional forecasts are behavioral, namely, significantly influenced by past forecasts, (ii) there exists a stock-bond dissonance: while forecasting behavior in the stock market seems to be herding, that in the bond market seems to be bold in the sense that their current forecasts tend to be negatively related to past forecasts, and (iii) the dissonance is due, at least partially, to the individual forecasters’ behavior that is influenced by their own past forecasts rather than others.. Even in the same country, forecasting behavior is quite different by market
Between Revolutionary and Oriental Sage: Paul Cézanne in Japan
No full textContributing to the discourse on a “Global Cézanne Effect,” this essay examines the artistic and critical reception of Paul Cézanne in Japan during the early twentieth century. The author pays particular attention to the complex relationship between the French artist’s painting practice and Eastern aesthetic theory. Compatibilities arise, at times, as a result of accidental or even willful mistranslations of French, English and German texts. The author also analyzes Cézanne’s reception in the context of German Expressionism’s foray into East Asia, along with the contemporary resurgence of Southern school literati painting.departmental bulletin pape
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