I always though the bad decisions were similar enough that a repeat of the Japanese style stagflation would happen state side. In 2009 I bet that the US would experience a Japanese style lack of growth, but I didn't really count on the ability of the FED to prop up the markets the way it did. I think they are kind of running low on Ammo though they the probably still have a few clips left so dont count those guys out when it comes to market distortion.

The BOJ is really paving the way in what the markets can live with and is the working trial for what the other federal banks can get away with. They are also the lowest on ammo since they have been making the most drastic manipulation moves. If we start seeing market manipulation action from the BOJ fail in any noticeable way then the end game could be in sight globally. So far though they have shown that markets will accept both 0 and negative interest rates so they are really a working demonstration of how far one can manipulate the economy before investors tell them to pound sand.

Fundamentally though the BOJ has created a huge debt bomb that cannot be unraveled using conventional means so Japan may also end up being the first trial country for some sort of eventual debt cleanup event. Its probably either them Italy or Spain. The world seems pretty content keeping Greece on life support but I don't think the European powers could support 2 failed states in the euro-zone for long. Either way I expect someone else will be the test case for what ever method is used to deleverage these nations.

There are some fundamental differences with Japan and the Us. Japan is a nation of savers and the US is a debt fueled nation. The USD is a reserve currency status and the US has lesser demographic problems (but still there is a boomer problem). In spite of those differences Japan has kind of served as a model of the economic policy that has happened in the US over the past 7 years so its not surprising that the results are similar. They didn't have a huge market bounce like we did but they had the same wage stagflation coupled with reduced buying problem that we have had here in the US. Their people have suffered as a results and they also had a lost generation.