Bullish expectations or a decline in self-discipline against risks are the key causes for a bubble, said Masaaki Shirakawa, the governor of the Bank of Japan.

Shirakawa said that this raised a difficult issue of how a central bank should deal with such an elusive problem. He said the dollar carry trade, and the fact that people were able to easily take risk without geographical and time constraints, had made the responses of a central bank all the more difficult.

He made the comments on 4