Bank of Japan Gov. Toshihiko Fukui

In announcing the policy shift, the central bank pledged to anchor short-term interest rates near zero to ease fears that an end to the "quantitative easing" policy may trigger a spike in short-term rates and put a damper on the economy by raising the cost of housing loans and other borrowing.

"Interest rates will stay at zero for some time, then stay extremely low and go through an adjustment period," Bank of Japan Gov. Toshihiko Fukui said at a news conference. "It's up to the economy how much and when."

The Japan Times Weekly: March 18, 2006
(C) All rights reserved