Deputy Governor of Bank of Japan, Hirohide Yamaguchi recently announced that the central bank is all set to battle deflation, but he did not provide a lot of detail into what actions he plans on taking, despite the fact the Government has been constantly pressurizing BoJ to step up effort to support the country's economy.

Mr. Yamaguchi, a career central banker who is seen as being close to the Governor of the central bank Masaaki Shirakawa, shared that the bank's most important task as of now is to boost demand and show its determination to fight and beat deflation so that the general population does not assume that price declines will continue to happen and, as a result, hold off spending.

"To overcome deflation, patient treatment of its root cause, which is a lack of demand, is necessary. It's important to make sure corporate sentiment doesn't shrink, so that deflation doesn't trigger economic weakness and further aggravate deflation", he said.

The thoughts were shared by Mr. Yamaguchi in a speech he had delivered to business lenders on Wednesday, in Kagoshima, southern Japan.