Japan’s monetary policymakers are sticking to their guns

been few months in monetary history as consequential as this September. Countries everywhere have tightened the screws on borrowers to smother inflation. But there has been a notable holdout. The Bank of Japan (), the pioneer of modern zero-interest rate and bond-buying operations, is standing firm. The country has struggled with low inflation, and even deflation, for decades. Its monetary policy has been designed to make financing conditions for companies and households as easy as possible, in an effort to get them to spend. In 2016 the adopted a policy of yield-curve control, which caps 10-year government bond yields at around 0%. This becomes more difficult when the rest of the world is raising interest rates, since the growing spread leads to a weaker currency, as investors seek stronger returns elsewhere.