Bank Of Japan Considers More Easing

Even though the Japanese economy seems to be recovering, the Bank of Japan is considering more easing measures to fight deflation. Further purchases of Japanese government bonds seem unlikely, though; the most likely tool to be used is pushing down interest rates.

When asked about the Nikkei report [speculating on more easing] at a regular press conference Friday, Japan Finance Minister Naoto Kan said he hasn't received any messages from the central bank regarding its reported plans.

"I haven't heard such a message directly from the BOJ. But both the government and the bank share the stance that each has to make its own efforts to beat deflation," Kan said, according to Dow Jones Newswires.

Japan has been in mild-deflation, or stable-price, mode for so long that an appearance of inflation would be the surprise of the new century. I note, largely parenthetically, that an acclimatization to no inflation does lead, eventually, to the central bank overdoing it. Government officials are people too, and they do make the same mistakes their fellow humans in the private sector are wont to make.