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After decades of battling deflationary stagnation, which started after the bust of the domestic asset price bubble in the late 1980s, Japan’s macroeconomic environment has begun to change. During the deflationary period (1990-2020), the country operated in an anomalous setting of ultra-low growth, subdued inflation, and extraordinary monetary accommodation. But the confluence of the Covid-19 pandemic, global supply shocks, and aggressive fiscal and monetary stimulus appears to have finally “reflated” the Japanese economy.