Shirakawa defends BoJ from attack Japan's central bank governor has defended his record on monetary easing, amid mounting political pressure on the Bank of Japan ahead of December's general election. In a speech on Monday, Masaaki Shirakawa said the key to overcoming Japan's persistent state of deflation lay in companies and households making "full use" of "extremely accommodative financial conditions . . . both in terms of interest rates and access to financing." He told an audience of business leaders in the industrial heartland of Nagoya that the onus was on the government to "raise the attractiveness of domestic investment and lay the foundations that encourage firms to embark on challenges." Mr Shirakawa, who is expected to stand down when his five-year term ends in April, has long been accused by politicians across the spectrum of failing to do enough to reverse Japan's longstanding trend of falling prices. As the December 16 election approaches, those calls have grown louder, led by Shinzo Abe, leader of the opposition Liberal Democratic party. Mr Abe, who polls suggest will probably become the country's next prime minister, has said that confidence in the world's third-largest economy could be lifted by "unlimited" monetary easing and a clear inflation target of 2 per cent. But Mr Shirakawa has resisted attempts to compromise the bank's independence. The key to encouraging businesses and households to take advantage of low rates and banks eager to lend is through "decisive deregulation," he said on Monday. Though he did not elaborate, elsewhere in the speech Mr Shirakawa touched on the need to lift Japan's growth rate by raising the participation of women and the elderly in the workforce. Some members of the ruling Democratic Party of Japan have also urged the BoJ to do more to stimulate a faltering economy which risks slipping into recession by the end of the year. Seiji Maehara, the economy minister who has attended recent BoJ monetary policy board meetings, was seen by many as the driving force behind an unprecedented joint statement from the BoJ and the government last month that formally committed both parties to overcoming deflation. There are divisions within the BoJ, too. Minutes of the bank's second policy meeting in October, showed that two board members supported a hardening of the BoJ's pledge to maintain its current monetary stance until the 1 per cent inflation goal was "in sight." Takehiro Sato, supported by Takahide Kiuchi, proposed that the BoJ say it would keep its current position until 1 per cent inflation "has been steadily maintained." The suggestion was rejected by the other seven board members, however. Mr Abe's aggressive stance on easing policy - arguing that a big increase in the monetary base would "correct" the strong yen - has helped to send the Japanese currency lower against all 16 major currencies over the past month. At 3pm on Monday in Tokyo the yen stood at 82.26 to the US dollar, near the seven-month high of 82.52 it hit last Wednesday. On Monday, Mr Shirakawa said the increase in Japan's monetary base had kept pace with the US and the eurozone since June 2008, increasing about 10 percentage points, expressed as a share of nominal gross domestic product. Japan's monetary base is defined as the notes and coins in circulation plus banks" current account deposits at the BoJ. At about 27 per cent of nominal GDP, Japan's monetary base is already much bigger than the US (16 per cent) and the eurozone (18 per cent), Mr Shirakawa noted. At the end of October, when the central bank increased its asset-purchasing programme by Y11tn to Y91tn and unveiled an unlimited programme of low-cost loans, Mr Shirakawa declared: "There is no monetary policy in the world that the BoJ has not tried yet."