The Bank of Japan has decided to lift its quantitative easy-money policy, an emergency and unprecedented measure introduced five years ago to pump vast amounts of interest-free money into a stagnant economy plagued by falling prices. The much-heralded decision, made Thursday, opens the way for a return to the traditional method of monetary adjustment: the application of interest-rate functions.

The BOJ had set a number of conditions for reversing the easy-money policy, including stable above-zero increases in the Consumer Price Index. The CPI rose marginally for four consecutive months from October to January, and the bank expects the upward trend to continue. As such, the BOJ decision inspires confidence that deflation, which has dogged the economy for more than a decade, is finally coming to an end.

However, a strong belief persists, within the government and the ruling coalition, that the real economy has yet to overcome residual deflationary pressures. There is also concern that speculation over the future direction of monetary policy might cause excessive fluctuations in the market. For these reasons, the central bank has rightly put together a package of "market-stabilizing" measures.