Japan’s Departure from it’s Stated Course is Cause for Analysis.

On February 3, 2016, Haruhiko Kuroda announced the Bank of Japan would institute negative interest rates, following the Swiss National Bank’s move months earlier.

Mr. Kuroda further remarked that this move marks “the most powerful monetary policy framework in the history of modern banking” and added that ,“It is possible to cut the interest rate further from the current level of minus 0.1 percent.

Japan has been in a decades long economic recession, and global pressures have further stunted growth, although currency devaluation could help short term exports to key markets – perhaps. The move further highlights how bleak the international community sees prospects for growth in the short term.

Japan also recently departed from its pacifist stance by “reinterpreting” Article 9 of their constitution – drafted after it’s surrender ended WWII. The measure now gives Japan sizeable interpretation and “self defense” capacity with a military presence on land, sea, and air – a direct contradiction to Article 9. The measure, championed by Japanese Prime Minister Shinzo Abe will also allow Japan to provide military support to its U.S. ally in East Asian conflicts with North Korea and China.

The politicians are busy in Japan. One can only wonder what these new policy moves really hold for the future, but one thing is certain, these moves mark a rapid departure from Japan’s long-stated beliefs and underscore the powerful economic and geopolitical forces at work throughout the world.

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