TOKYO, April 3 (UPI) -- Bank of Japan Gov. Haruhiko Kuroda told Japanese lawmakers the central bank would do all it can to achieve 2 percent inflation in two years to beat deflation.
The newly appointed governor, regarded as an advocate of aggressive monetary easing, told the lower house's budgetary committee it is not easy to overcome the country's chronic problem of falling prices but assured "we will mobilize all policy measures the BOJ has."
The appointment of Kuroda as the bank's head is a victory for the new government of Prime Minister Shinzo Abe, whose top priority is to lift the economy out of its deflationary mode, which has hurt Japan's economic growth. Kuroda, 68, had earlier been president of the Asian Development Bank.
The BOJ doubled its inflation target to 2 percent in January.
"Keeping two years in mind, we will attain the target at the earliest possible time by prompting bold monetary easing in terms of quality and quantity," Kyodo News reported Kuroda told the budgetary committee.
The Abe government also has taken other stimulus steps to boost the export-driven economy. Some of these already have helped sharply bring down the value of the yen against the U.S. dollar. A lower yen helps make Japanese exports less expensive.
Abe described deflation as a "monetary phenomenon" and called the argument by some that monetary policy alone cannot help achieve the inflation target a "myth."
"A strong commitment by the BOJ has affected the foreign exchange and stock markets. If [the economy] is in a virtuous cycle in which industrial competitiveness, employment and consumption improve, that would result in a 2 percent price hike," Abe said.
