The world's major economies are on the verge of accelerated disinflation as deflationary pressure grows on a global scale, Bank of Japan Gov. Toshihiko Fukui said Thursday.
"I think world price movements are about to trigger accelerated disinflation," Fukui told a a regular news conference.
He is the first central bank chief to acknowledge disinflation on a global level after the heads of the U.S. Federal Reserve and the European Central Bank recently expressed caution over excessive falls in inflation rates.
Fed Chair Alan Greenspan said Wednesday that inflation is "now sufficiently low" and that further disinflation would be an unwelcome development.
Disinflation occurs when the inflation rate declines over time. Deflation occurs when the inflation rate becomes negative.
Fukui said central banks will continue to deal with possible inflation in the future but must also play a similar role in tackling deflation.
Meanwhile, Fukui said the BOJ had incurred about 65 billion yen in unrealized losses on its shareholdings as of March 31. A BOJ spokesman later said the figure came to 65.8 billion yen.
The BOJ started buying shares directly from commercial banks in November as part of efforts to shield banks' balance sheets from sharp falls in share prices that have recently brought the key Nikkei average to 20-year lows.
Fukui said the central bank has bought some 1.4 trillion yen in shares, nearly half the amount in its share-purchase program. He said the BOJ has no plans to expand the scope of the share-buying scheme.
Fukui also indicated the central bank has no plans to buy bank shares to shore up share prices, as called for by some ruling party lawmakers, saying it is "difficult" to take such a measure.