The 0.8 percent contraction in the second quarter gross domestic product, coupled with dive in Tokyo share prices, has increased pressure on the Bank of Japan to further ease its already loose monetary grip by setting inflation targets. Tuesday’s terrorist attacks in the United States and the ensuing plunge in world financial markets are expected to magnify that pressure.

Business circles, financial authorities and politicians are obviously making the demands in unison because they believe the economy would be easier to manage if nominal figures remain on the plus side. But if we scrutinize Japan’s economic conditions from a global perspective, it is easy to understand that such a policy option has little chance of succeeding, and I would like to make this point clear before the Diet reopens to discuss the issue.

Unable to view this article?

This could be due to a conflict with your ad-blocking or security software.

Please add japantimes.co.jp and piano.io to your list of allowed sites.

If this does not resolve the issue or you are unable to add the domains to your allowlist, please see out this support page.

We humbly apologize for the inconvenience.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.