The Bank of Japan has become much more aggressive since Mr. Kuroda took over a year ago. The central bank’s “shock and awe” approach is a welcome departure from the gradualist ways of previous experiments with balance sheet expansion. Communication has become much clearer too. However, while QQE is working as well as could reasonably be expected at this point, inflation is unlikely to reach the BoJ’s 2% target over the coming year. The upshot is that the BoJ still has more work to do.
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