The Monetary Committee’s announcement of its assessment that monetary policy would remain accommodative for a considerable time, which means that the Committee’s assessment is that it would not raise the interest rate immediately after the interest rate increase in the US, which is what actually happened when the interest rate in the US was raised in December, also serves as a counterforce to the forces for appreciation.
Together with the excesses left by the bubbles which I will explain later, this is one of the fundamental reasons why Japan’s economy remained sluggish in the 1990s. Lessons from Japan’s “lost decade” Next, let me talk about what kind of lessons we should take from Japan’s so-called lost decade.