Japan defends easy money gamble
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Japanese Finance Minister Taro Aso defended his country's fight against deflation this week, saying that the yen's decline is an unintended consequence of policies designed to boost growth.
Japan is using a combination of monetary policy and government spending in an effort to beat 15 years of deflation. But the actions have also weakened the yen, raising the specter of retaliatory action and a currency war in Asia.
"The yen's devaluation against the dollar is just a by-product," Aso told CNN on the sidelines of the G20 meeting in Washington Thursday.
"What we would like to do is to get out of the recession caused by the deflation," Aso said. "That's our target."
Deflation, or falling prices, has a chilling effect on economic growth. It can encourage consumers to hold back on spending in the belief that prices will fall.
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