More from the Wall Street Journal overnight on Japan.

It says:

  • The Bank of Japan (BOJ)’s strategy to end the country’s long slump rests as much on psychology as on economics
  • There’s no econometric model that directly connects the ongoing money-printing program to the central bank’s plan to generate 2% inflation by next year
  • BOJ officials openly admit the campaign will only work if enough people believe in it
  • That if the public understands the central bank’s policies and expects them to transform the economy, then changes their behavior in ways that really do change the economy

But, it goes on … a BOJ survey of public opinion shows:

  • The percentage of people who said they expect prices “will go up significantly” over the next year has been falling — to 13.5% in the June survey from 19.7% in the previous quarterly survey in March
  • The portion that expects prices to go up “significantly” over the next five years has also shrunk, to 26.0% in June from 29.4% in December

More at the link (its ungated): Mr. & Mrs. Watanabe Skeptical of Mr. Kuroda