Does the Japanese government have much control over the economy?

Though Japan operates under a free market economy, in which private spending has the largest impact on the economy, the Japanese government does exercise considerable control. The government has numerous tools at its disposal to adjust the direction of the overall economy. I will highlight three of the most powerful of these. The Ministry of Finance influences the Bank of Japan (BOJ), which controls the availability of credit by adjusting interest rates. The BOJ lowers interest rates when the economy requires stimulation, and raises them when inflation needs to be suppressed. Access to cheap credit enables companies to purchase, invest and hire employees, all of which boost the economy. The Ministry of Finance also prepares the budget, including suggestions for setting tax rates and outlining government spending. Lowering tax rates and increasing government spending also stimulate the economy. The government willingly goes into debt during times of recession to provide a boost to the economy. Finally, the Ministry of Economy, Trade and Industry (METI) actively steers business activity in Japan, including production, trade and distribution of products. METI works closely with businesses to shape trade policies, predict future economic trends and identify growth industries for investment. All of these government measures are taken with the goal of maintaining steady growth and price stability while keeping unemployment at a minimum. We can see from recent events that the government is not always successful in its efforts, but it still maintains a powerful hold on the economy nonetheless.