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Opinion
William Pesek

Japan Is Running Out of Options

Dissent within the Bank of Japan is growing. That means more volatility ahead.
Kuroda is increasingly isolated.

Kuroda is increasingly isolated.

Photographer: Haruyoshi Yamaguchi/Bloomberg/Getty Images

The New York Times recently lit up the Japanese Twittersphere with a cartoon that was a little too accurate for comfort. In it, a stretcher marked "economy" is loaded into an ambulance with "Abenomics" painted on the side; the vehicle lacks tires and sits atop cinder blocks. Prime Minister Shinzo Abe looks on nervously, holding an IV bag.

The image aptly sums up Japan's failure to gain traction in its push to end deflation. The Bank of Japan's unprecedented stimulus and Abe's pro-growth reforms have yet to spur a recovery in inflation and gross domestic product growth, and the country is yet again in recession. Worse, BOJ Governor Haruhiko Kuroda is rapidly running out of weapons in his battle to eradicate Japan's "deflationary mindset."