The Bank of Japan has decided to increase the supply of 10 trillion yen per a year, that is, more than one hundred billion USD, into the market. It is to get out of the deflation to "mild inflation" after the US FRB's plan, as they say. The aimed inflation rate is set at 1% while 2% by FRB.
I suspect it won't work out as planned. In Japan, the long lasting deflation is due to the lessened domestic demand. The past governments have proceeded deregulation policies in every aspect. It has resulted in, not the activation of the economy in Japan, but the drastic drop of most of the people's life standard.
The increased money supply in the market only stir the investors to do their job for commodities in the international market etc. It won't increase the demand by the people. The stock market is instantly responding to this change in the economy policy.
It could trigger an uncontrollable inflation as well. In such a case, it may be very difficult for the government or the BOJ to calm it down. The governmental debt has been taken by ourselves through banks or Japan Post. In the coming few years, possibly, in 2 or 3 years, the debt amount exceeds the whole deposit of the people. It may be the time when such a drastic inflation starts.
For the past two decades, haven't we learned that deregulation has been merchandizing the social capitals which should have never been treated in that way? No more short term investments in the international markets destroying the peoples' peaceful lives.
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