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The Bank of Japan’s Remarkable Decade

With the departure this month of the Bank of Japan’s longest-serving governor, Haruhiko Kuroda, the BOJ has entered a new era. Thanks to Kuroda’s successes in defeating deflation and restoring economic activity, there is now light at the end of the tunnel for Japan’s chronically underperforming economy.

TOKYO – On April 8, Haruhiko Kurodastepped down after a decade as governor of the Bank of Japan – the longest governorship in the BOJ’s 142-year history. When he was appointed, the Japanese economy’s main problem was deflation: inflation had been negative, on average, for 15 years, implying that the economy was chronically performing below its potential. Moreover, many exporters were suffering from a soaring yen, which hit ¥75 per $1 in October 2011, compared to ¥124 per $1 in June 2007, just before the global financial crisis.