What could policymakers do next if QQE doesn’t work?

The Bank of Japan’s 2% inflation target remains out of sight despite the benefits of a much weaker exchange rate. With the potential to expand QQE in its current form limited, new approaches are therefore likely to be needed to permanently lift price pressure. The most promising, but also most controversial, option would be to directly finance public spending via central bank lending. If done with caution, an uncontrollable surge in prices is no foregone conclusion.