Effective monetary policy depends on public trust and expectations.
Despite this, Asahi Shimbun and TV Asahi repeatedly undermined confidence through doubt-driven commentary.
Such rhetoric erodes the very foundation required for economic recovery.

2016-03-25
Below is today’s Ōiso-Koiso column in the Nikkei Shimbun titled “The Power and Transparency of Monetary Policy.”
It would be no exaggeration to say that there is no finer commentary than this.
All emphasis in the text other than the title is mine.
The role of monetary policy is to regulate the amount of money circulating in the economy.
In order to escape deflation, the Bank of Japan purchases government bonds held by banks and supplies money in return.
However, if banks do not lend this money and instead deposit it back at the BOJ, the amount of money circulating in the economy does not increase.
Negative interest rates are intended to encourage bank lending, lower market interest rates, and stimulate borrowing demand, but they take time to have an effect.
As a limitation of quantitative easing, constraints related to the outstanding balance of government bonds are often cited.
Yet even without relying on banks, the BOJ has numerous means to increase the amount of money in circulation.
In essence, money is an interest-free, perpetual government liability.
If money is newly issued and supplied to the government, the government obtains funds that bear no interest and require no repayment.
If the government then implements substantial tax cuts using these funds, the effect on economic revitalization would be dramatic.
This is the real-world version of the famous, irrefutable economic thought experiment that prices will inevitably rise if massive amounts of banknotes are scattered from a helicopter.
Some will argue that this would lead to hyperinflation, but inflation is precisely the objective at present.
If the scale is properly adjusted, hyperinflation will not occur all at once.
Arguments that deny fiscal financing themselves presuppose that it leads to inflation.
Escaping deflation requires a line of thinking opposite to inflation prevention, and cooperation between the government and the central bank is indispensable.
The BOJ has the power to achieve its inflation target, but taking the next step requires political resolve.
What truly moves the economy is not the government or the central bank, but private-sector activity oriented toward the future.
The role of the BOJ is to create an environment in which the public can trust its commitment to “doing whatever it takes” to overcome deflation and act accordingly.
Former Federal Reserve Chairman Ben Bernanke reflected after leaving office that monetary policy consists of 98 percent communication and 2 percent action.
Beyond surprises, improved transparency based on careful and candid explanations is the lesson of U.S. monetary policy, which prevented deflation and achieved early recovery after the financial crisis.
If the public comes to harbor doubts about escaping deflation, the achievements to date will be lost.
If a convincing path is shown regarding what “doing whatever it takes” truly means, the public will act in anticipation, producing effects even before policies are actually implemented.
This is the essence of monetary policy that works through expectations.
Those with sound minds who read this essay will surely notice something.
Every time the Japanese government attempts to pursue a sensible economic policy, it has invariably been the Asahi Shimbun and TV Asahi that have continued to say things that obstruct it.
Reading in particular the final line, “If the public harbors doubts about escaping deflation, the achievements to date will be lost,” one cannot help but recall the remarks of Furutachi Ichirō, who repeatedly voiced doubts himself in an effort to instill doubt among the public.
It should also become clear just how childish and malicious their conduct has been.