An Analysis Of Japan 's Zero Interest Rate And Quantitative Loan Monetary Policy

Because of bubble economy collapsed, Japanese economy stagnated in 1990 s. Japan was the first country of the world trying to use zero interest rates and quantitative easing monetary policy in history. Although Japan once had several times short-lived economic recoveries, in the long term, its economic development is still in a state of long-term stagnation. It is common in Japan that national assets drastically reduced; stock prices, housing prices and land prices sharply declined; consumption remained weak and the prices were falling. The Japanese government continues to try and try to get rid of deflation, and want to achieve economic recovery. From 1990, Japanese government constantly adjusted the official discount rate, reduced the interest rates, and the interest rates was declined to zero in 1999, and Japan entered zero interest rate era. Japan stopped the zero interest rate policy in 2000. With world economy declining, Japanese economy fell into stagnation again. In 2001, Japan began to use quantitative easing monetary policy. Japan’s zero interest rates and quantitative easing monetary policy has broken the world precedent, it was the first country to take this kind of policy in the world, its policy affected its own economic operation, and affected other countries’ at the same time.As one of China’s largest trading partner, Japanese economic development also has a great impact on China, its zero interest rates and quantitative easing monetary policy will give important reference for our financial policy selection. Our economy has a stable and rapid development during 30 years of reform and opening up, our market economy has improved constantly, it has created favorable conditions for China’s interest rate policy. We should take example by Japanese zero interest rates policy and quantitative easing monetary policy on basis of our financial policy status.In this paper, the author analysis Japanese monetary policy after bubble economy collapsed(after 1990) based on related theories of zero interest rates and quantitative easing policy and according to the time line. The author analysis the background of the policy operation, the content of the policy, the effectiveness of the policy, summarized the experience of Japan and the implications for China’s development. On analysis, this paper is based on historical data, verifying the validity of the different time periods of Japan monetary policy. However, due to the limitation of the author’s analysis ability, the analysis for the Japanese zero interest rates and quantitative easing policy was relatively simple. This paper still needs further improvement.