Japan Hayashi: easy policy needed as deflation risk high

Published: 31 Aug 2009 17:24:27 PST

TOKYO, Sept 1 - Japan may need to maintain an accommodative monetary policy for some time as the risks of the country falling into deflation are high, Economics Minister Yoshimasa Hayashi on Tuesday.

It will also be necessary for the government to scale back extraordinary measures enacted in response to the global economic crisis as part of an exit strategy, Hayashi told reporters after a cabinet meeting.

Hayashi added that he hopes Japan's new government will consider these points as it manages the economy.

In a historic election on Sunday voters handed control of the government to the Democratic Party of Japan, ending five decades of almost constant rule by the Liberal Democratic Party.