How Japanese policymakers ended up in a very deep hole

on tighter monetary policy from the Bank of Japan () have experienced very few victories over the past three or so decades of ultra-low interest rates. The first decision by the ’s new governor, Ueda Kazuo, proved to be no exception. The central bank’s flagship policy of yield-curve control, which caps ten-year government-bond yields at 0.5% with aggressive bond-buying, was left unchanged on April 28th. Instead, the ’s policymakers announced a review of their monetary policy. The exercise is expected to last a year, possibly longer. There is a bleak comedy in seeing speculators nursing burned fingers once again. But the policy review may transpire to be more meaningful than the bureaucratic exercise it appears at first glance. The report will assess decisions made by the since the Japanese economy entered a period of deflation in the 1990s.