For the last few years, Japan’s economy has been nothing short of pathetic. Unemployment is still high, and deflation is a constant concern. Recently, however, it seems Japan may be on the brink of growth, and Japan’s Central Bank is already anxious to tighten.  Maybe a little too anxious. The Bank of Japan is determined to contain inflation- which is currently infinitesimally low- at the expense of economic growth. It has already announced that it will begin tightening monetary policy, through a combination of higher interest rates and a lower money supply. It has also hinted towards a tightening of fiscal policy- raising taxes to offset a large budget deficit. However, economic growth can not yet be taken for granted.  The Economist reports:

Recent mis-steps by both politicians and technocrats have highlighted three of the biggest risks to recovery. One is China, with which Japan’s relations hit a new low this week. Figures released on May 25th showed…the volume of exports fell, and has been roughly flat in the past three months.

Read More: Land of the Three Mistakes