The government called on the Bank of Japan to address the risk of deflation at the central bank's Nov. 19-20 policy meeting, according to minutes of the meeting released Thursday.
"Deflation would be a significant risk factor with respect to the stability of the Japanese economy," a representative from the Cabinet Office told the Policy Board meeting. "The government expected the bank to pay due attention to the risk of deflation" and continue to support the economy through its monetary policy, according to the minutes.
Representatives from the Cabinet Office and the Finance Ministry attend BOJ policy meetings. They do not have voting power but can voice opinions and propose a delay in BOJ votes.
At the November policy meeting, the BOJ upgraded its assessment of the economy for the third straight month, while maintaining its key interest rate at 0.1 percent to support the economy.
Within less than two weeks of the meeting, BOJ Gov. Masaaki Shirakawa officially admitted Japan is in deflation and said the central bank will do "its utmost" to overcome the declining trend in prices.
Having faced pressure from Cabinet ministers to do more to support the economy, the BOJ decided to launch a new loan program at an emergency policy meeting on Dec. 1. The bank also showed last week a tougher definition of price stability while reinforcing its pledge to fight deflation.