Bank of Japan Begins Phasing Out Quantitative Easing

The former foreign minister of Japan has expressed the view that the Bank of Japan (BOJ) should gradually phase out its unconventional monetary easing policies. This stance comes as the BOJ has recently taken steps to normalize its monetary policy, marking the end of its decade-long quantitative easing program. The move is aimed at addressing deflationary pressures and stabilizing the economy, which has shown signs of recovery with rising inflation expectations and a falling unemployment rate.

The BOJ's decision to taper its asset purchases and allow long-term interest rates to rise indicates a growing confidence in the economy's resilience. However, the central bank remains cautious, closely monitoring economic indicators for any signs of weakness. The normalization process is expected to be gradual, with the BOJ carefully observing the economic landscape to ensure stability.

This shift in monetary policy aligns with global trends, as other major central banks have also begun to tighten their policies in response to improving economic conditions. The BOJ's actions are part of a broader effort to return to a more conventional monetary framework, which could have significant implications for Japan's financial markets and the global economy.

The former foreign minister also announced his participation in the Liberal Democratic Party's presidential election. He emphasized that the specific decisions regarding monetary policy should be made by the BOJ. Additionally, he proposed using tax surpluses to provide tens of billions of yen in local subsidies to alleviate the pressure of daily living costs. The Liberal Democratic Party's pre-election cash distribution plan did not gain public support, and the party aims to achieve wage growth exceeding inflation within two years. The party is seeking new alliance partners among those who can reach a consensus on basic policies, with plans to closely communicate with the Japan Innovation Party and the Democratic Party for the People.