The Bank of Japan’s high-wire act

A fierce dispute is raging over Japanese monetary policy. There are good reasons for this, as odd features of Japan's economy make it particularly vulnerable to both precipitate or delayed changes in policy.

The dispute involves political issues as well as those of economic management. Many politicians and bureaucrats are keen that the Bank of Japan should delay any monetary tightening for two separate reasons. The first is a fear that Japan's economic recovery is far from firmly rooted and coul