Taro Aso casts doubts on Japan central bank's two-year inflation goal

March 22, 2013 at 6:05 AM
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TOKYO, March 22 (UPI) -- Japanese Finance Minister Taro Aso expressed skepticism Friday about the Bank of Japan's two-year, 2 percent inflation target.

"I believe that it will take considerable time to get out of deflation and move toward inflation, and then push up [prices] to 2 percent," Aso told a news conference.

The central bank's target is in line with the government of Prime Minister Shinzo Abe's stimulus measures to lift the economy out of years of chronic deflation, which pushes prices down affecting economic growth and threatening jobs.

Aso's comment could raise doubts on the ability of the central bank's new leadership to achieve the two-year inflation deadline, Kyodo News reported.

Aso called for more fiscal stimulus and growth strategies so the central bank doesn't have to shoulder the responsibility alone of meeting the inflation goal.

Haruhiko Kuroda, an advocate of bold monetary easing, assumed his new post as governor of the Bank of Japan Thursday, stressing his determination to end deflation, the Japan Times reported.

"I was told to do all I can and bring the Japanese economy out of deflation," Kuroda said after meeting with Abe. "I replied that I will do everything I can together with my two deputy governors."

Kuroda's monetary easing may include buying longer-term government bonds, which would bring huge amounts of yen into the market.

Kuroda said he is optimistic of achieving the inflation target and didn't seem worried about any asset inflation bubble, Kyodo said.

Chief Cabinet Secretary Yoshihide Suga said Kuroda "is an ideal person who can work in harmony with the government's determination to implement bold monetary policies."

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