Cross investment between major industries has allowed many companies to avoid bankruptcy and reform. This process, undertaken after U.S. occupation ended in 1952 and known as keiretsu, was developed to limit foreign investment and strengthen Japanese business ties. The process is now slowly falling apart. Others want the Bank of Japan to cut short-term interest rates further, as if additional minuscule reductions will somehow work. This process, however, would be extremely unpopular with consumers, who largely blame the banks for much of the nation's woes.
Japanese elections are only four months away.
Others, including me, would suggest consideration of another approach creating modest inflation. Falling values of stocks and real estate have hurt consumers and lenders. Using monetary policy to pump more money into the system would create a modest inflation that would presumably lead asset values higher. More aggressive outright bond purchases could lead to slightly higher prices in coming years. Yes but nothing else is working.