From The Wall Street Journal (page A1 in the print edition):
Japan's economic revival is about to prompt a central-bank shift on monetary policy that has the potential to rattle global financial markets.
With the world's second-largest economy heading into its fourth consecutive year of expansion, Bank of Japan officials look set to begin slowly unwinding a policy of easy money that has been a major fixture of the world economy for nearly a decade. The change would involve the withdrawal of trillions of yen from the country's banking system and, eventually, an increase in interest rates from long-standing levels at or near zero.
Once the Bank of Japan reverses course, it could mean higher interest rates on everything from U.S. mortgages to New Zealand government debt. That, in turn, could damp global stock markets, including Japan's, one of the best-performing markets over the past year. Further, the yen could strengthen -- it has already started to do so -- affecting trade flows by making Japanese goods more expensive abroad and imports to Japan cheaper.
One question: Have the steady increases in the federal funds rate that commenced in June 2004 raised global long-term interest rates? No, you say? OK, another question: Why will changes in the Bank of Japan's behavior yield a different result?