Japan's QE policies helpless to domestic economic resurgence (2)

In the long run, Japan's continually printing money will depreciate the Japanese yen, but it will also lead to a series of consequences, with Japanese debt crisis being the first one. As the world's largest debtor nation, Japan's total debt had increased to about 237 percent of its GDP in 2012, which is higher than that of Greece and Italy. Fitch had downgraded Japan's sovereign rating to A+ in 2012.

More severely, Japan is falling into deeper deficit financing. It is increasing the financial expenditures to stimulate domestic economy and expand armaments, but its revenues are decreasing. Therefore, Japan will not last long to stimulate the economic growth by financial expenditures. In addition, Japanese enterprises will also suffer an exchange loss in the overseas investments due to the depreciation of yen, and the increasing costs of imported raw materials will make Japanese enterprises get worse.

In a word, the implementation of QE monetary policies is not a panacea for Japan.

Read the Chinese version: 日本量化宽松无助经济复苏; Source: People's Daily Overseas Edition; Author: Shi Jianxun

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