TO WATCH FOR RISKS OF DEFLATIONARY SPIRAL
Senior Bank of Japan Deputy Governor Yutaka Yamaguchi said on Monday there was still a risk that the economy would enter a deflationary spiral, and that indicators needed to be monitored carefully to prevent it.
"We will continue to carefully watch conditions as we cannot rule out the danger of the economy's falling into a deflationary spiral," he told a private seminar.
Yamaguchi said the BOJ would continue its current easy monetary policy stance to stem a continuous two-year fall in prices, providing ample funds actively if financial markets became unstable. On the foreign exchange market, he said he hoped that currency rates reflected economic fundamentals.