Therefore, Japan’s economy looks to be on course toward achieving the 2 percent price stability target, and we feel that developments under our policy are promising. II. The relationship between monetary policy and the government’s growth strategy  So, what is the relationship between the Bank of Japan’s monetary policy and the growth potential of Japan’s economy (Chart 6)?
The Japanese government has been pursuing a three-pronged strategy that comprises bold monetary easing, flexible fiscal policy, and a growth strategy that aims to spur private investment. These policies are often referred to as the three arrows of Abenomics. The role of monetary policy in this policy mix, in an immediate sense, boils down to overcoming deflation.