Monetary policy: What is understandable in Japan is not so in the euro zone

Since the banking crisis in 1997-98, Japan has conducted a monetary policy based on zero short-term and then long-term interest rates. This is the case currently in the euro zone, and it could therefore be thought that if this policy was conducted in Japan for 20 years without triggering a major crisis, it could also be the case in the euro zone. But Japan’s situation is completely different from that of the euro zone. Japan, where income distribution is very negative for wage-earners, chronically has zero or negative inflation, which is not the case in the euro zone where wages and labour costs are currently accelerating. Despite the very expansionary fiscal policy, Japan has excess savings, and therefore a considerable private sector savings surplus (especially among companies). This is not the case in the euro zone, where, if fiscal policy were "normal", there would be no excess savings, and no private sector savings surplus. The Bank of Japan in reality has to combat the risk of deflation, which is not the case with the ECB.