Reuters/Tokyo
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Bank of Japan board member Sayuri Shirai said the central bank’s “forward guidance” on policy gives it scope to take more step if needed to achieve its goal of 2% inflation, and means it will not end its monetary easing until the target is reached.
The BoJ launched radical stimulus in April, pledging to double base money through aggressive asset purchases in order to meet a 2% inflation target in about two years, which Shirai called the first set of its policy communication.
The second set of forward guidance, made at the same time, called for the BoJ to make adjustments as appropriate, to achieve and maintain the target.
“In my view, this second set of guidance warrants any necessary actions by the Bank beyond the two-year horizon, if it judges it necessary to do so in light of stably achieving 2%,” Shirai said in a speech last week in Washington, DC to the International Monetary Fund and the Board of Governors of the US Federal Reserve.
Shirai, a former IMF economist who is among the BoJ’s nine board members, had warned in June that it would take considerable time to achieve the 2% inflation target in a country that has been mired in deflation for 15 years.
Governor Haruhiko Kuroda said in April that the BoJ was determined to keep its easy policy for as long as needed, signalling his readiness to offer further stimulus or maintain an ultra-easy policy beyond two years if necessary.