Finance Minister Naoto Kan repeated a plea for the Bank of Japan to work with the government on reversing a decline in prices that threatens the economic recovery.
"Fiscal policy focusing on stimulating demand will have some impact against deflation," Kan said in the Diet as the BOJ began a two-day meeting in Tokyo. "The central bank can make an inflationary impact with monetary policy."
Kan has been pressing the BOJ to do more as his ability to spur the recovery is constrained by a public debt burden that's approaching 200 percent of gross domestic product. BOJ Gov. Masaaki Shirakawa and his colleagues will expand a ¥10 trillion credit program for lenders at the meeting, according to 12 of 17 economists surveyed by Bloomberg.
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