The further enhancement of monetary easing decided this time, together with the cumulative effects of the past measures, will ensure the return of Japan’s economy to a sustainable growth path with price stability.
In most cases, it would be futile, and indeed erroneous to try and prevent some of the adjustments mentioned above. Healthier bank and household balance-sheets, more reasonably valued assets, and the end of demand-supply mismatches in the real estate sector are conditions necessary for a more solid, sustainable recovery. Yet policymakers cannot stand idle and wait for these imbalances to resolve themselves.