Central banks respond to crisis challenge Japan is the latest central bank to take dramatic measures to boost a moribund economy. The Bank of Japan's new governor, Haruhiko Kuroda, shocked markets with a radical stimulus plan that includes doubling the size of its government bond holdings within two years. He has shifting the bank's policy target to try to lift the country out of nearly two decades of deflation and minimal growth. The move caused the yen to fall sharply in value, which will help Japan's exports. The US Federal Reserve has been doing the same thing - buying government bonds to stimulate the economy - which also has the effect of pushing down the value of the dollar leading to complaints from other countries of a so-called currency war. By contrast the European Central Bank on Thursday kept its main interest rate at 0.75 percent - higher than Japan, the US and Britain - and it is not printing new money like them. ECB head Mario Draghi said they are ready to cut interest rates if necessary but the bank's role is different: "We can not replace lack of capital in the banking system, that's quite clear. We can not compensate lack of actions by governments. He did say the ECB was studying the economic climate closely because there was no certainty the euro zone economy would pick up: "In the coming weeks, we will monitor very closely all the incoming information on economic and monetary developments, and assess the impact on the outlook for price stability." Not surprisingly Draghi was questioned about the eurozone's latest brush with break-up - Cyprus. He said the initial decision for a levy on all bank deposits was a mistake, that was quickly corrected. And he stressed that what happened in Cyprus with wealthy bank depositors having money taken from their accounts was not a template for any future bailouts as others have suggested. More about: Cyprus, ECB, Economic crisis, Eurozone in crisis, Japan, USA