Bank of Japan policy makers have started to call on the government to act to contain fiscal expansion. The deflation in Japan has intensified and the slight recovery has remained intact, thus, the BOJ policy makers are maintaining a conservative approach and are not keen on easing out the monetary policy further.

Though the risk of another recession are receding as the economic growth accelerated last quarter but most economists feel that a lot more credit needs to be added later during the year.

The government is likely to confront BOJ to take more action to resume pressure on it to fight deflation in the months ahead. If the yen gains and the stocks slump again, there's a strong probability for a further action by the BOJ.

The yen is making new highs against the dollar at 84.83. The government wants more rise to curb the deflation. Following the announcement of the liquidity steps the Nikkei 225 Stock Average has already risen 5 percent.

A rehabilitation plan soon needs to be worked out to come out of the deflation problem and the monetary policy is one of the first steps towards this.