The Bank of Japan announced Aug. 11 that it would abandon its "zero-interest rate" policy, by which is meant that the money market interest rate at the shortest end of terms would be virtually zero.
The decision, which could be interpreted as either tightening or putting to an end the extraordinarily loose monetary policy, followed a lengthy row among scholars, businesspeople, Cabinet ministers and ruling party executives, in addition to monetary authorities.
There are pros and cons to the decision. For the time being, the crucial point is whether the action was correct as a means of preventing future instability in the economy, as central bankers seem to be implying, or whether it was wrong, for frustrating the realization of long-awaited economy recovery, as many people and some politicians are afraid of.