(Bloomberg) -- Japan could have faced deflation for several years starting around 2016 without the Bank of Japan’s massive monetary stimulus program, according to research published by the central bank.
The result of the study “indicates that price growth could have been moving in negative territory without unconventional monetary policy in place from 2016,” according to a paper written by several BOJ economists released Friday. A chart in the paper showed prices moving below zero until around 2022.
As is customary for research from individual BOJ economists, the paper notes that the views expressed aren’t the central bank’s official stance.
The study found that monetary stimulus beginning in April 2013 boosted the level of gross domestic product by as much as 1.8 percentage point on average through the first quarter of this year. Governor Kazuo Ueda ended the bank’s massive monetary easing program in March. The ultra easy policy also lifted inflation by as much as 0.7 percentage point on average for that period, it said.
The paper is part of the BOJ’s broad policy review of the past quarter century, and the result is in line with the central bank’s past studies that generally favor its past policy conduct. Ueda has said the result of the broad policy review will be released after the next policy meeting in December.
BOJ watchers don’t expect the findings of the study to prompt immediate policy action. Ueda has already begun normalizing policy earlier this year with its first rate hike in 17 years in March, followed by a second rate increase in July.
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