Architects of Japan’s Easy-Money Policies Are Changing Their Minds

As Japan’s central bank prepares to meet this week, the architects of the country’s decade-long policy of low interest rates say that strategy has outlived its usefulness. Their concern has flipped from stagnant prices to entrenched inflation.

Japan’s current leader appears unconvinced.

Since taking office last year, Prime Minister Sanae Takaichi has continued to embrace Abenomics, the economic strategy championed by former Prime Minister Shinzo Abe, leaning on the central bank to keep rates low while pursuing record fiscal spending.

Abenomics was conceived in 2012 to jolt Japan back into growth. But the deflationary spiral and strong yen that it was designed to address have reversed. For most of the past four years, inflation has remained above the central bank’s 2 percent target. The yen has fallen against the dollar to multidecade lows.

“The situation is completely different now,” said Koichi Hamada, a former top aide to Mr. Abe and one of the key advisers behind Abenomics. Therefore, he said, “I changed my mind right now to recommend monetary constraint.”

Article source: https://www.nytimes.com/2026/09/15/business/japan-economy-rates-abenomics.html