The governor of the Bank of Japan on Sunday urged advanced economies to keep unprecedented low interest rates and other stimulative measures in place given the slow pace of economic recovery. Addressing the "major and common challenges for advanced economies," Masaaki Shirakawa said "we need to continue with unprecedented easy monetary policy, given the current economic conditions."
As much of the rich world struggles to rebound from the economic crisis, Shirakawa said the United States and Europe could learn from Japan's "lost decade" of deflation.
Earlier this month the Bank of Japan surprised markets by adopting a near zero rate policy and announced further easing measures to help safeguard a fragile recovery from the threats of deflation and a strong yen. The central bank lowered its key rate to a range of between zero and 0.1 percent, from the rate of 0.1 percent set at the height of the financial crisis in December 2008.
In the United States the Federal Reserve has indicated it will keep extraordinarily low interest rates in place for an "extended period" and has moved ever-closer to restarting purchases of US treasuries in the hope of stimulating a lacklustre recovery.
Many European countries have been reluctant to extend crisis spending as the indebtedness of some eurozone members has come under fierce scrutiny, a stance that has drawn fire from the United States.
Shirakawa said policy responses would "vary from country to country" but added that the challenges were "common to advanced countries despite the differences in economic conditions."