Passive quantitative tightening could be the Bank of Japan’s next step toward normalization. Here’s why.
If price stability is the legal mandate of the Bank of Japan (BOJ), and the central bank’s official target for price stability is 2%, as measured by the Consumer Price Index (CPI),* then why are fluctuations in prices the norm for Japan?
Across the developed markets, central banks have embarked on a tightening path—with one exception: the Bank of Japan (BOJ).