A row has erupted at the heart of Japanese policy-making as Finance Minister Kiichi Miyazawa upbraided the central bank governor for advocating an early end to 'zero' interest rates.
Mr Miyazawa said Bank of Japan chief Masaru Hayami's comments on Wednesday, ahead of this weekend's Group of Seven (G7) meeting of finance ministers and central bankers in Washington, were ill-timed.
'It is up to the governor's judgment [whether to raise rates], but for a man who has to go to the G7 meeting, it is a bit of headache,' Mr Miyazawa said.
Mr Miyazawa indicated that the United States, which is concerned that signs of economic recovery in Japan are still weak, would urge Japan to maintain the zero interest rate policy at tomorrow's G7 meeting.
The US and International Monetary Fund believe 'concerns over possible deflation still linger in the Japanese economy and discussions will be held with that view in mind', Mr Miyazawa said.