Policies seeking to end deflation, the most pressing issue for the Japanese
economy, have been put into effect. However, there is some skepticism with
regard to the effectiveness of quantitative easing in ending deflation, and significant concerns exist regarding a possible exacerbation of the latent risk of further increase in the nation’s fiscal deficit. While indicating the importance of inflation targeting
and aggressive monetary policy in eliminating deflationary expectations, the experts
interviewed in this issue of the NIRA Policy Review point out that it will also be
essential to maintain fiscal discipline and implement effective growth strategies in
order to end deflation.