1. ＢＯＪ after the burst of the bubble Yoichi Takita, Nikkei

2. 1999.2 Zero interest rate policy Serious financial crisis in 1997~1998 Huge fiscal stimulus in 1998 Jump up of long term interest rate BOJ declared zero interest policy until deflationary pressure eases

3. 2000.8 Exit from Zero interest rate Japanese economy looks like recovery thank to IT boom BOJ raised Short term rate by 25BP Just after the Exit IT boom was over

4. BOJ stepped into Quantitative Easing 2001.3 BOJ stepped into QE Continue zero interest until Core CPI will turn to be plus Policy target to the volume of Bank deposit on BOJ To increase Japanese Government Bond in order to inject money

5. Exit from QE 2006.3 BOJ got rid of QE 2006.7 BOJ raised Short term interest rate by 25BP Japanese economy is recovering and Core CPI is turning to be positive

6. Lessons from Japanese experience Coordination between fiscal and monetary policy is crucially important Do not misjudge false dawn as real dawn To restore financial system is also crucially important especially after the burst of the huge bubble because of balance sheet problem in private sector

7. Deflation or Asset price deflation In Japan deflation was rather modest. Cumulative fall of CPI is 3% between 1997~2004 Asset price decline was serious; Equity and Real estate price declined roughly 80% from top to bottom Such a sharp decline hit the BS especially Bank’s BS

8. Need of political decision To inject public money to injured Banks is crucially important But it is difficult facing the protest from the public