In actual economics, many different households, businesses, and monetary institutions such as banks exist, but let us assume that besides the government sectors and BOJ
, there is only one private bank.
"There is nothing in recent economic indicators that would lead the BOJ
to change its economic outlook now," said Norio Miyagawa, senior economist at Mizuho Securities.
While combating prolonged deflation, the BOJ
has stressed demographic factors as a cause of deflation and argued for the necessity of a wide range of structural reforms such as a boost in women's participation in the labor market and further innovation in Japanese industry.
He said the BOJ
's stance has "changed dramatically" and he believes it has steered toward its 2 percent inflation target, adding he would give 110 points out of 100 points to the BOJ
"We cannot miss this opportunity," the BOJ
executive director said.
"It would be outrageous if the BOJ
weren't doing anything to beat deflation and rather paving the ground for an exit from its easy monetary policy."
But the BOJ
under Hayami had consistently resisted this pressure, believing there was already excess liquidity available to financial institutions, which could not or would not use the excess funds they already had (as huge current account balances at the BOJ
Neither the BOJ
nor the Japanese government can be blamed for failing to attack from the supply side the root problem of oversupply.
has maintained the zero-interest-rate policy since February last year.
Nakaso assumed the BOJ
post in November 2008 and was the first BOJ
executive director to be reappointed since the BOJ
law came into force in 1998.
On the BOJ
's possible purchase of foreign bonds, seen as aimed at driving down the yen, Kuroda said the BOJ
"does not face the need to consider" such a step, adding that seeking a stable currency is the government's role and that markets should decide exchange rates.
s next regular rate review is on September 6-7.