Monetary and fiscal policy of Japan

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Politics of Japan
Constitution and Laws
The Monarchy

Naruhito

Fumihito

Executive

Fumio Kishida (LDP)

Second Kishida Cabinet (Second Reshuffle)
(LDP-Komeito coalition)
Legislature

Fukushiro Nukaga

  • Vice Speaker

Banri Kaieda

Hidehisa Otsuji

  • Vice President

Hiroyuki Nagahama
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Saburo Tokura

Bank of Japan
  • Governor

Kazuo Ueda

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Japan bonds
Inverted yield curve in 1990
Zero interest-rate policy started in 1995
  30 year
  20 year
  10 year
  5 year
  2 year
  1 year
Japan money supply and inflation (year over year)
  M2 money supply
  Inflation

Monetary policy pertains to the regulation, availability, and cost of credit, while Fiscal policy deals with government expenditures, taxes, and debt. Through management of these areas, the Ministry of Finance regulated the allocation of resources in the economy, affected the distribution of income and wealth among the citizenry, stabilized the level of economic activities, and promoted economic growth and welfare.

The Ministry of Finance played an important role in Japan's postwar economic growth. It advocated a "growth first" approach, with a high proportion of government spending going to capital accumulation, and minimum government spending overall, which kept both taxes and deficit spending down, making more money available for private investment. Most Japanese put money into savings accounts, mostly postal savings.