The government and the Bank of Japan are expected to release their first joint report Friday in which they reaffirm their determination to fight deflation, government sources revealed Wednesday.
The report analyzes the causes of deflation and considers its negative effects on the economy, such as how it raises the real debt burden on companies and stifles corporate capital investment, the sources said.
This marks the first time for the government and BOJ to jointly issue a report on the matter.
By emphasizing their joint efforts to combat the problem, they hope to provide the financial markets with a boost, the sources said.
The report refrains, however, from calling for any specific monetary policy measures and simply says the BOJ should continue to provide the market with ample liquidity and manage its policies appropriately.
The authors of the report are members of a study group set up last month by senior officials of the BOJ, the Cabinet Office, the Finance Ministry, and the Ministry of Economy, Trade and Industry.
It will be submitted to Heizo Takenaka, minister of economic and fiscal policy, who will then report on it to the Council on Economic and Fiscal Policy in a meeting Friday.