Japan’s Economic Policy Management under the Bretton Woods System

This chapter reviews Japan’s monetary policy management around 1969 when Japan started, for the first time in its history, to experience the problems of an international balance of payments surplus country. It describes the arguments that the author as a Bank of Japan economist made on the issues of domestic price stabilityprice stability and monetary/fiscal/foreign exchange rate policy management in Japan under the Bretton Woods system of fixed, but adjustable, exchange rates with the US dollar as a predominant reserve currencyreserve currency. It is explained in this chapter that the author argued against a tightening of Japanese monetary policymonetary policy studies (OECD)Japanese monetary policy in September 1969, and suggested a shift from the rigid fixed exchange rate system to a more flexible regime such as a crawling-peg.