Toshihiko Fukui, Governor of the Bank of Japan was facing a complex situation in the autumn of 2007. Economic recovery had allowed the central bank to raise its zero interest rate policy, leave in place for years, and interest rates to 0.5%. The Bank of Japan was eager to ‘normal’ to increase to more exercise effective monetary policy. However, the appropriate timing and approach has been controversial, especially since the government did not want a rate hike this could potentially hind legs … Read more »

Toshihiko Fukui, Governor of the Bank of Japan was facing a complex situation in the autumn of 2007. Economic recovery had allowed the central bank to raise its zero interest rate policy, leave in place for years, and interest rates to 0.5%. The Bank of Japan was eager to ‘normal’ to increase to more exercise effective monetary policy. However, the appropriate timing and approach has been controversial, especially since the government did not want a rate hike could affect economic growth and the increase in the already high tax burden of debt.
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from
Akiko Kanno,
Laura Alfaro
Source: Harvard Business School
35 pages.
Release Date: 8 January 2008. Prod #: 708017-PDF-ENG
Kinyuseisaku: Monetary Policy in Japan (A) HBR case solution