Abstract

What problems lie ahead in monetary normalization? Can the country withstand the shock? This "private multifaceted review" explores key issues through thorough commentary and empirical analysis.

This book explores central banking in a new era. It looks back on the unconventional monetary policies implemented by the Bank of Japan over the past quarter century and aims to provide information for policy decisions in case the Bank of Japan must once again fight deflation in the future. From a third-party perspective, neither a policymaker nor a market participant, it examines the effects and side effects of monetary policy and presents future challenges.

The Bank of Japan has ended its massive monetary easing and raised its policy interest rate. While ostensibly promoting tapering of government bond purchases, in reality it is pursuing quantitative tightening (QT) to shrink its massive balance sheet. However, the road to returning to what BOJ Governor Kazuo Ueda calls "normal monetary policy" is likely to be long and difficult. Which tools should the Bank of Japan keep in its monetary policy toolbox? What points should it pay attention to in the process of financial normalization? If there are areas that are difficult for policymakers to verify, what are they, and what conclusions can be drawn from them? This book answers these questions, acting as a "private-sector version of a multifaceted review."

Author’s Information

Ikuko Samikawa: Head of the Financial Research Department and Chief Researcher, Japan Center for Economic Research.

Born in 1967. After graduating from the School of Law (LLB) at SOAS, University of London in 1990, she joined Nikkei Inc. After working in the Financial and Economics Departments of the Editorial Department, she was seconded to the Japan Center for Economic Research in 1997. After working as a specialist researcher at the Embassy of Japan in the UK, she became a senior researcher at the Japan Center for Economic Research in 2013. She has held her current position since 2012.

She completed her doctoral studies at the Graduate School of Business and Commerce, Keio University. She is a visiting professor at the Faculty of Economics, Keio University (2017-2018) and an associate professor at the Hitotsubashi University Institute of Economic Research (2020-21). She is a member of the Financial Function Strengthening Council, an ad hoc member of the Council on Tariffs, Foreign Exchange and Other Transactions, and a member of the Study Group on National Debt Management (all current positions).