Finance Minister Taro Aso said Friday that Japan will try to boost its credibility by pulling the economy out of nearly two decades of deflation, a day after the 225-issue Nikkei Stock Average nosedived 7 percent. "Japan's credibility would increase if Japan can end a prolonged recession coupled with asset deflation" by implementing the "three arrows" of Prime Minister Shinzo Abe's economic policies, Aso said at a press conference.

The South African Reserve Bank held interest rates unchanged Thursday in the face of high inflation, while warning of major risks to already mediocre growth. A downbeat Reserve Bank governor Gill Marcus said the main interest rate would stay at five percent, despite the bank cutting growth forecasts for the year. The bank's rate-setting committee, she said, "is increasingly concerned about the deteriorating outlook for the South African economy."

By Marc Jones LONDON (Reuters) - Federal Reserve policymaker James Bullard said on Thursday that while the U.S. economy was improving, he would like to be sure inflation was heading back towards target before the bank started winding down its support program. "I think the Chairman, as he always does, said the right thing which is it depends on the data," Bullard, head of the St Louis branch of the Fed and a current voting member, said at an OMFIF event.

The Bank of Japan unleashed a torrent of liquidity Thursday to quell government bond yields amid concern that higher long-term interest rates could squeeze mortgage payers and crimp spending. The central bank announced a two trillion yen ($19 billion) fund-supplying operation after the yield on the benchmark 10-year Japanese government bond hit 1.0 percent, its highest level in over a year. The BoJ is active in supplying finance to banks and other potential buyers in the bond markets every day, but the scale of Thursday's operation was large by recent standards.