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This paper uses a Markov-switching model with structural breaks to characterize and compare regional business cycles in Japan for the period 1976-2005. An early-1990s structural break meant a reduction in national and regional growth rates in expansion and recession, usually resulting in an increase in the spread between the two phases. Although recessions tended to be experienced across a majority of regions throughout the sample period, the occurrence and lengths of recessions at the regional level have increased over time. [ABSTRACT FROM AUTHOR]

Focuses on testing the expectations hypothesis (EH) on the Japanese bond market. Overview of the structural changes in the Japanese financial markets; Mathematical models used to test the EH using Japanese Treasury interest rates; Implications of nonstationarity for the EH.

Investigates the effect of regional trading blocs on trade patterns in Japan. Background on trends in Japanese trade; Analysis of Japanese trade using the gravity model of international trade; Differences in the effects of the European bloc and the North American bloc on trade patterns in Japan.

The Japanese yen appreciated strongly and rapidly against other major currencies in the wake of the massive March 11, 2011, Tohoku earthquake. High volatility and disorder in financial markets prompted the G-7 authorities to jointly intervene to weaken the yen. This episode resembled the two most recent G-7 coordinated interventions: the June 1998 effort to strengthen the yen and the September 2000 effort to strengthen the euro. Exchange rates reacted strongly and quickly to these three interventions, moving 3 to 4 percent in the desired direction within 30 minutes of the announcement and exhibiting lower volatility in the following days. G-7 authorities have used intervention very sparingly since 1995, yet the March 2011 policy action is a reminder that it can be used to calm markets and move the exchange rate in the desired direction. Intervention has become much less common but more successful. (JEL F31, E44, E58) [ABSTRACT FROM AUTHOR]

The article presents a reprint of the article "Quantitative Easing: Entrance and Exit Strategies," by the Federal Reserve Bank of St. Louis, Missouri, which appeared in the April 1, 2010 issue of "Review." It provides a comparison on the quantitative easing strategies used by the Federal Reserve to the Japanese experience in 2001 and 2006. It criticizes the central bank independence based on the quantitative easing.