At the end of last month the Japanese authorities unveiled a new strategy in their ongoing battle with deflation by shifting the monetary policy focus to long-term interest rates. In a bid to achieve its inflation target of 2.0%, the Bank of Japan will target 10-year bond yields, fixed at about 0%, in an effort to control and promote a steeper yield curve. On top of this, the central bank plans to continue with its asset purchases. Headline inflation averaged 0.8% last year, but is expected to slip into negative territory this year. Elsewhere in the region, Q2 national accounts data for New Zealand revealed that output rose by 3.6% (y-o-y), up from a revised 3.0% in Q1. The ongoing dynamism shown by the economy has buoyed growth expectations for this year and next.