There must have been a horrible sense of déjà vu at the Bank of Japan yesterday. Twice this decade, Japan's central bank has tried to raise rates and twice it has been beaten into retreat.

But, unlike in August 2000, when it increased rates prematurely in the teeth of deflation only to reverse course a few months later, yesterday's cut by 20 basis points to 0.3 per cent was due to circumstances largely beyond its control.