Hours after Japanese Deputy Prime Minister Naoto Kan cautioned about an increasing threat of deflation, the Bank of Japan boosted its assessment of the economy. Policymakers held Japan's overnight lending rate at 0.1%. "Given the bank's independence, the government can't ask the BoJ directly to cut rates or buy more bonds," said Hiroshi Miyazaki, chief economist at Shinkin Asset Management. "That's why it's using this term 'deflation' to force the BoJ to step up its accommodative measures."
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