Monetary Policies in Japan: Structural Challenges and Evolutions from The Lost Decades to Post-COVID Dynamics

Navigating a distinctive economic landscape characterized by long persistent deflationary mindsets and a set of unique monetary policy challenges, Japan's experience with inflation and deflation starkly contrasts with the inflationary pressure observed in many other major economies around the world. Through literature review and data collection methodologies, this paper examines the Bank of Japan's (BOJ) implementation of diverse monetary policies spanning recent decades since the 1990s, with a specific emphasis on its strategies in response to the economic conditions post-COVID-19. By integrating theoretical frameworks, this paper critically assesses the rationale and efficacy of these policies, while delving into the discrepancies between anticipated and realized outcomes. The research identifies three key structural problems underpinning the disparityage, debt and risk structures. Emphasizing the decisive role of real economy, it further predicts forthcoming supply-side structural transformations in Japan, offering valuable insights into the latest significant policy adjustments in Japan and intricate world economy.