But both moves have subsequently been convincingly reversed and the Nikkei 225 Index for example has now fallen back below 15,000. It is very close to its lowest close this year. Not much of a vote of confidence. Watch closely for more ongoing evidence of a credit crunch in Japan i.e.are the banks severely restricting credit. Another thing to keep an eye on is the 10-year Japanese government bond.
Japan is thus clearly in a deflationary trend.
When people believe that prices will continue falling, they are more likely to save their money than spend it. Much of this is believed to be forced sales by corporations and private investors, rather than Japanese government sales, and increased purchases by the Europeans more than made up for it, but the trend bears watching. To conclude, Japan is showing the symptoms of deflationary contraction. But be skeptical of anything you read that assumes that such measures will work. Look for evidence before you believe it.