Japanese tightening and asset prices: a lag is not a forecasting rule
Bank of Japan records distinguish the sequence of rate increases and falling stock and land prices.
Updated Oct 30, 2026
Must a historically observed lag repeat in another country?
Repeated increases
On 1989-05-31, the official discount rate rose from 2.50% to 3.25%. Further increases brought it to 6.00% on 1990-08-30.
Sources [1]
Prices and financial distress
Ueda’s retrospective describes stocks declining in early 1990, land prices falling in 1991 and the subsequent economic impact of bad loans.
Sources [2]
Sequence is not a universal rule
Chronology alone does not establish a fixed delay or magnitude for asset-price declines after rate hikes. Credit conditions and the response to financial losses also matter.
Sources [2]
Limits for a Korean forecast
Historical Japanese land prices and current Korean housing prices are different measures. This case does not forecast the timing or magnitude of a Korean decline.
Sources [2]
Sources
- Bank of Japan — Historical official discount ratesAccessed Oct 30, 2026
- Bank of Japan — Kazuo Ueda remarks on asset prices and monetary policy, 2000Accessed Oct 30, 2026