Title: Japanese Recession - Wikipedia
Headings: Japanese Recession
Japanese Recession
Contents
Cause
Effect
Steps towards improvement
See also
References
Bibliography

Content: Contents
1 Cause
2 Effect
3 Steps towards improvement
4 See also
5 References
6 Bibliography
Cause
Though Japan's recent recession cannot be tied to one single event, analysts believe that one of the leading causes is linked to a 14-year high for the yen compared to the U.S. dollar. This section needs expansion. You can help by adding to it. ( December 2009)
After the September 1985 Plaza Accord, the yen's appreciation hit the export sector hard, reducing economic growth from 4.4 percent in 1985 to 2.9 percent in 1986. The government attempted to offset the stronger yen by drastically easing monetary policy between January 1986 and February 1987. During this period, the Bank of Japan (BOJ) cut the discount rate in half from 5 percent to 2.5 percent. Following the economic stimulus, asset prices in the real estate and stock markets inflated, creating one of the biggest financial bubbles in history. The government responded by tightening monetary policy, raising rates five times, to 6 percent in 1989 and 1990. After these increases, the market collapsed. The Nikkei stock market index fell more than 60 percent—from a high of 40,000 at the end of 1989 to under 15,000 by 1992.