The Bank of Japan’s latest delay in reaching its 2 percent inflation target despite more than four years of aggressive monetary easing has thrown Governor Haruhiko Kuroda’s chances at a new term into doubt. The BOJ pushed back Thursday the timing of achieving the target to around…
The Bank of Japan’s latest delay in reaching its 2 percent inflation target despite more than four years of aggressive monetary easing has thrown Governor Haruhiko Kuroda’s chances at a new term into doubt.
The BOJ pushed back Thursday the timing of achieving the target to around fiscal 2019, the sixth time it has done so since Kuroda implemented the bank’s ultraeasy policy in April 2013.
“ (2 percent) is still an unrealistic target, even if they push the timing back, “ said Sayuri Shirai, a former member of the BOJ’s policy-setting board who is now a professor at Keio University.
„It’s so far off from what financial markets actually expect. A target of 1 percent for the time being would be more appropriate, “ she said.
The BOJ has struggled at every turn to reach the target as tepid wage growth dampens consumers‘ willingness to spend, making it hard for businesses to raise prices. Crude oil prices have yet to make a full recovery from last year’s lows, further clouding the outlook for prices.
The central bank will not be able to hit the goal even if it continued its monetary easing over the next 10 years, an analyst at a major financial institution said.
