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A shopping street in Japan with pedestrians pictured
Photo: Bloomberg

The Bank of Japan's policy rate has been at or below 0.5% since December 1995. The central bank innovated and currently engages in a massive program of "quantitative easing". Stripping out the occasional direct effect of sales tax legislation, consumer prices have been amazingly stable over the past 21 and a half years and since December 1995 the average rate of inflation has been slightly less than 0.1% per year.

If the Bank of Japan had strived for price stability, its policies would have been a remarkable success. However, the central bank targets 2% inflation so judging by its ability to generate inflation, its policies have been an abject failure.

Read more about Japan's futile quest for inflation in this report (pdf).

Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on market developments, the fund manager's skill, the fund's risk profile and management fees. The return may become negative as a result of negative price developments.