In 2012, when Japan was in chronic deflation, policymakers had to implement monetary easing, including lower interest rates. Today, however, Japan faces the opposite problem: a weak yen, combined with higher interest rates in the US, calls for tighter monetary policy.
NEW HAVEN—On a trip to Sapporo, the city on Japan’s northern island where my parents are from, my husband and I encountered gentle people, mild autumn, and wonderful food. As tourists living and working in the United States, we also enjoy very low prices: lunch at a high-quality restaurant is only about $20 per person. While it was convenient for us, like many other tourists who have gone to Japan to take advantage of the good, if cheap exchange rates (if yasu) has been difficult for the Japanese economy.