The domestic economy is currently not on the verge of entering a deflationary spiral, Bank of Japan Gov. Masaru Hayami said Thursday, adding that he will monitor the effects of governmental pump-priming efforts.
Speaking at a news conference, Hayami acknowledged that both wholesale and consumer prices are falling, but that it is uncertain whether the situation was largely due to excessive supply.
"The government's latest stimulus package has new features and is large in scale, and I think (its implementation) will be a positive factor, and I would like to wait further" to check its impact, the BOJ chief said. "I do not believe that the current economic situation can be labeled the beginning of a deflationary spiral," he stressed, adding that the central bank would leave monetary policy unchanged for the time being.