TOKYO — Japan brushed aside criticism that aggressive easing by the central bank could set off competitive currency devaluations among other nations, saying Friday that the Bank of Japan is trying to end nearly 20 years of deflation — not manipulate the yen.
Prime Minister Shinzo Abe’s calls for aggressive action by the central bank, which have prompted a slide in the yen, have also raised fears in Europe of a currency war if other central banks adopt similar policies.
Japan may have to defend its actions at a two-day meeting of financial leaders from the Group of 20 industrial and emerging nations that begins Feb. 15.
“Monetary easing is aimed at pulling Japan out of deflation quickly,” the Japanese finance minister, Taro Aso, said Friday. “It is not accurate at all to criticize” Japan for manipulating currencies, he added.
The Bank of Japan, the central bank, agreed Tuesday to double its inflation target to 2 percent and said it would pump more money into the economy via a new, open-ended commitment to buying assets beginning in 2014 — measures known as quantitative easing and intended to lift the country out of its fourth recession since 2000.
“The B.O.J. is pursuing powerful monetary easing without interruption,” the central bank’s governor, Masaaki Shirakawa, said Friday. “Japan may be facing an opportunity now to emerge from stagnation.”
Still, Japan’s consumer price index fell 0.1 percent in December from the same month a year earlier, and even when excluding volatile food and energy prices, it dropped 0.2 percent, according to data released Friday.
The yen skidded to a two-and-a-half-year low of 90.695 against the dollar Friday, which reinforced expectations for more monetary easing. The currency has slumped 11 percent against the dollar since early November as Mr. Abe stormed to an election victory in December with bold promises to end decades of intermittent growth.
After the central bank’s overhaul of its policy in the past week, Mr. Shirakawa offered a note of caution, saying it was important that the bank remain flexible in guiding policy in the future.
“Long-term interest rates will spike and erode the effect of monetary easing,” he said, “if people perceive the B.O.J. as having shifted to a policy of recklessly buying government bonds, focusing narrow-mindedly on achieving 2 percent inflation.”
Minutes of the central bank’s December meeting, released Friday, provided a hint of the possible next policy step.
They showed that a Bank of Japan board member had proposed cutting interest rates, already at rock bottom, on some market operations and scrapping the 0.1 percent interest paid on excess reserves held at the central bank. The idea was voted down, 8 to 1.
Since the global financial crisis that started five years ago, central banks in the Britain and the United States have also engaged in aggressive quantitative easing programs, which can help support economic growth by lowering interest rates but also tend to weaken the currency.
Chancellor Angela Merkel of Germany waded into the currency debate Thursday, singling out Japan as a source of concern following the Bank of Japan’s moves.
“I don’t want to say that I look towards Japan completely without concern at the moment,” she said at the World Economic Forum in Davos. “It is known that in Germany we are of the opinion that central banks are not there to clean up political bad decisions and a lack of competitiveness.”
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