Finally someone getting serious (maybe)

Bloomberg:  Shinzo Abe Approved as Japan’s Prime Minister by Parliament
"Gross domestic product shrank at an annualized 3.5 percent pace in the three months through September after a contraction in the previous quarter, meeting the textbook definition of a recession. The median estimate of analysts surveyed by Bloomberg News is for a 0.5 percent contraction this quarter. Exports slid for a sixth month in November....Abe agreed with his coalition ally Natsuo Yamaguchi of the New Komeito Party yesterday on a policy package that includes “bold monetary easing” to reach an inflation target of 2 percent, bolstering his party’s position in the lower house...The New Komeito party had cautioned in the campaign before this month’s election that forcing the central bank to reach a 2 percent inflation target risked undermining its independence...The agreement with New Komeito also calls for a “large” extra budget for the current fiscal year to March 2013 and deregulation of the energy, environment and health care sectors. .... Consumer prices excluding fresh food, a benchmark monitored by the central bank, haven’t advanced 2 percent for any year since 1997, when a national sales tax was increased...One Bank of Japan policy maker had embraced the idea of open-ended monetary stimulus as early as last month, according to a record of the Nov. 19-20 board meeting released today in Tokyo. The unnamed member said that open-ended easing until the central bank achieves its 1 percent inflation goal is one option, the minutes of the meeting showed. "


Tim Duy:  Missing the Big Japan Story
"In my opinion, a higher inflation target by the Bank of Japan is not particularly interesting.  After all, the Bank of Japan can't hit the current "goal" of 1 percent inflation.  I don't have much faith that renaming the "goal" a "target" and increasing it to 2 percent will be like waving a magic wand.  But something much more significant is afoot - the possibility of explicit cooperation, albeit perhaps forced cooperation, between fiscal and monetary authorities.  The loss of the Bank of Japan's independence to force the direct monetization of deficit spending is the real story." 

Interesting discussion of joint fiscal-monetary policy.