After the decline of Japan's core consumer price index accelerated to 1.2% year over year in December from 1% in November, the nations central bank has come under increased pressure to find any means possible to loosen monetary policy even further.
Reuters: Prime Minister Yukio Hatoyama echoed his finance chief, Naoto Kan, in calling for BOJ cooperation, telling parliament that the government will work with the central bank to overcome falls in prices. Data showed Japan's narrowest measure of consumer inflation fell at a record pace in December.
Kan, known as one of the most vocal cabinet critics of the BOJ, took a slightly stronger stance than Hatoyama, calling for the central bank to take a flexible approach on policy to support the economy.
"I expect the BOJ to support the economy by guiding monetary policy appropriately and flexibly, while keeping close contact with the government, in a way that is consistent with government efforts," he said on a policy speech.
Yet let's hope they don't go overboard, because hyperinflation is a real risk for the nation despite the deflation seen today.
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See Also:
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