As you know, Japan has unleashed an unprecedented monetary stimulus program. With the flood of cheap liquidity, the Japanese Prime Minister hopes to revive the flagging economy. The underlying assumption is that the monetary stimulus will lift inflation. This in turn will raise consumer confidence and corporate investments.

But as it goes, such things appear to work only in theory. In reality, Japanese companies are still shy of investing at home. In fact, their cash stockpile has been growing. As per an article in Bloomberg, the cash and deposits of private Japanese companies have shot up to about US$ 2.4 trillion. That's more than the size of Italy's economy. That's higher than even the liquid assets of American companies.

All in all, it seems Japan has set itself on the path of very high risk. There is a big question mark whether it will work. If it falters, it will wreck havoc in the Japanese economy.