The yen is weak, which erodes the purchasing power of Japanese consumers. Yet, the Bank of Japan is facing a dilemma. If it raises interest rates, this strengthens the yen, but threatens a financial crisis.

While the US Federal Reserve remains reluctant to cut interest rates, the European Central Bank has already lowered its key interest rates despite persistent inflationary pressure.

Monetary policy and fiscal policies were originally institutionally separated in the Treaties on the European Union. However, the European Union appears to be gradually moving towards ECB-financed government spending.

The Bank of Japan has announced a small interest rate hike, which is seen in the light of historically high share prices as a turning point. The euphoria could be premature.

The corona crisis has caused new distress in the European Monetary Union. Italy and other southern European countries are struggling desperately for financial assistance from the north, in particular from Germany.