Concern about the Japanese economy has increased as the Bank of Japan extended its bond-buying program. The central bank increased its commitment by $138 billion. The entire effort is expected to last through 2013.
The Bank of Japan’s plan is not a panacea. Most central banks around the world already have issued warnings that they cannot offset recessions, at least not entirely. The other message from these banks is that legislative policy is the only way to address the major problems that face the developed economic.
But the Bank of Japan’s effort may help the country a little, as its poor growth has been further hampered by a disintegration of its trade with China, brought on by territorial disputes. Several of Japan’s largest companies have warned that their earnings have been affected already and that the problem will worsen between now and year’s end if the dispute continues.
Douglas A. McIntyre
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