From Prof Roger E.A. Farmer.

Sir, In your editorial “Political paralysis” (February 25), you disparage the idea that the Japanese government should start “price-keeping operations” by, in your words, “spending 25,000bn yen of public money to prop up the stock market”. Your characterisation of the proposed programme as spending could be misinterpreted. The Japanese government is not proposing to spend money; it is proposing to exchange one kind of asset, government liabilities, for another, equity. Further, there is no reason why relief need only be temporary. The Bank of Japan has the means to support share prices within wide bounds just as it has the power to support interest rates.