March 2009 (Revised May 2013)
Supplement
HBS Case Collection

Kinyuseisaku: Monetary Policy in Japan (B)

By: Laura Alfaro and Akiko Kanno

Format:Print
| Language:English
| Pages:7

Abstract

Toshihiko Fukui, Governor of the Bank of Japan, faced a complex situation in the fall of 2007. An economic recovery had allowed the central bank to abandon its zero interest rate policy, which had been in place for years, and raise rates to 0.5%. The Bank of Japan was eager to increase them to more "normal" levels to exert effective monetary policy. Yet the appropriate timing and approach was a controversial issue, especially as the government did not want a rate hike that could potentially hinder economic growth and increase its already large fiscal debt burden.

Keywords

Inflation and Deflation; Money; Central Banking; Interest Rates; Policy; Japan

Citation

Alfaro, Laura, and Akiko Kanno. "Kinyuseisaku: Monetary Policy in Japan (B)." Harvard Business School Supplement 709-056, March 2009. (Revised May 2013.)