Bank of Japan Gov. Masaru Hayami on Wednesday explained the central bank's wait-and-see attitude in its recent monetary policy decision, ruling out the possibility of further lowering the official discount rate or pursuing an inflationary policy to help revive the economy.
In a speech before a business society in Tokyo, Hayami reiterated that resuscitating the ailing financial system and reviving stagnant business conditions are two urgent problems that must be resolved concurrently.
"In order to solve financial institutions' bad loan problems, the economy itself must be stabilized," he said. "Since business conditions and the financial system are deeply woven together, weakness in the former may worsen the latter and vice versa."