A first in the history of central banks. Twenty years ago today, the Bank of Japan lowered rates to 0%, making money virtually free in one of the world's largest economies. The archipelago fought against the consequences of the Asian crisis, which led to the "lost decade", marked by economic stagnation and deflation. At the same time, rates in the United States amounted to 4.75%.

February 12, 1999 marks the beginning of an extraordinary financial experiment, which inspired the other major central banks. Barely two years after testing zero rates, the Bank of Japan has launched a program of asset purchases, known as quantitative easing, or QE. The balance sheet of the BoJ has exploded. Today, it represents 61.5% of the country's GDP.

The first will be the last

At the dawn of the twenty-first century, these measures aimed at easing the tension on sovereign rates and the yen have been seen as extreme and only applicable in Japan. But in the wake of the 2007-2008 crisis, facing the threat of deflation, the Fed and the European Central Bank adopted the same recipes. Unlike the US central bank and the ECB, which has started the normalization process or is preparing to do so, the Bank of Japan is still far from any monetary tightening, with inflation still close to zero. .

" Monetary policy saves time, but does not solve all the problems Explains Kenji Yumoto, a former government economic adviser in 1999 quoted by More Bank. Takahide Kiuchi, a former member of the Bank's board shares the same diagnosis: " I think there is no longer any solution in terms of monetary policy to revive Japan ".

Looking at the current economic situation of the Archipelago, it is surprising that the country is not in permanent crisis Says Jim Reid of Deutsche Bank. Indebtedness reaches more than 230% of GDP, the BoJ holds 43% of Japanese government bonds, 10-year government bond rates are still negative. Above all, prices have barely progressed in 20 years, in this country where one in three people is over 60 years old.

Etienne Goetz