Abenomics and the launch of Quantitative and Qualitative Monetary Easing

In April 2013, newly appointed Bank of Japan Governor Haruhiko Kuroda introduced what the Bank called 'quantitative and qualitative monetary easing,' pledging to roughly double the monetary base within about two years in pursuit of a 2% inflation target, a radically more aggressive approach than the BOJ's prior incremental easing steps. In his first speech as governor, delivered in Tokyo in April 2013, Kuroda framed the policy as reflecting the Bank's strong determination to do whatever was necessary to overcome deflation that had by then persisted for roughly fifteen years, explicitly breaking from the central bank's earlier caution. The program, a central pillar of Prime Minister Shinzo Abe's three-arrow 'Abenomics' strategy alongside fiscal stimulus and structural reform, combined large-scale purchases of government bonds with purchases of riskier assets such as exchange-traded funds, aiming to shift public inflation expectations as much as to ease financial conditions directly. While the yen weakened sharply and corporate profits and equity prices rose in the following years, headline inflation repeatedly fell short of the 2% target, underscoring how entrenched deflationary psychology had become after two decades of falling or stagnant prices.