Although Japan’s economy is not immune to a slowdown in the global economy, compared to the United States and Europe, the stability of Japan’s financial system and financial markets is notable, as evidenced by the risk spreads observed in funding markets and corporate bond markets (Chart 11).
Reasons for low growth over medium term Of the three time horizons that I have just explained, hereafter I will focus on medium-term economic developments. Although I have used the phrase “the two lost decades”, the causes of low growth in Japan in the 1990s and 2000s were different and it is somewhat misleading to discuss the two periods together.