Bank (BOJ) policy board of Japan convened a two-day meeting on March 8, 2006. Expected Policy Board of the Bank of Japan decided to end its five-year, super-easy monetary position, mainly due to a number of preset conditions termination of quantitative easing have been met - including stable year-on-year growth in the core CPI (Consumer prices). In accordance with the quantitative easing approach, the Bank of Japan was flooding the market with far more liquidity than is necessary. The decision to end the policy meant Japan returns to normal orientation of monetary policy interest rates after five years on the unconventional policies to combat persistent deflation. Decision of the Bank of Japan was not easy. Although the law establishes the independence of the Bank of Japan, there was considerable opposition from the government, including Prime Minister Junichiro Koizumi, in particular, the early fall of quantitative easing monetary. Because no major central bank has never been such a loose monetary policy, no one knew for sure how to end it smoothly. "Hide
by Mitsuru Misawa Source: University of Hong Kong, 21 pages. Publication Date: November 10, 2006. Prod. #: HKU601-PDF-ENG
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