This is as ignorant as they can get.
Japanese deflation is caused by not enough money in the system.
* * * * * J B K * * * * *
San Francisco
In January, Masaaki Shirakawa, the bank's governor, explained why he thought prices in Japan were falling and why monetary policy was the wrong tool to end the decline.
Mr Shirakawa gave three reasons for a lack of demand that he said was the root cause of deflation. First, deregulation and low-priced imports have put downward pressure on prices. Second, wages have fallen as an alternative to job cuts. Third, and in Mr Shirakawa's view the most important factor, people expect less growth in the future because Japan's population is aging and shrinking.
For Mr Shirakawa and the BoJ it follows that monetary policy is not the main answer to deflation. "The important thing in order to apply the brakes to a moderate downward trend in prices is to raise trend growth expectations."
http://www.ft.com/cms/s/0/755b86d8-31bd-11df-9ef5-00144feabdc0.html
