Bank of Japan former deputy governor Kikuo Iwata with a number of proposals, citing:
- warned inflation will miss the 2 percent target without stronger measures to boost consumption
- there are few tools left to ease monetary policy further
- cutting rates further could push some financial institutions into bankruptcy
Japan must boost fiscal policy
- ditch this year's scheduled sales tax hike
- commit to boost government spending permanently with money printed by the BOJ
"Inflation won't hit 2 percent just with the BOJ continuing its current policy. The BOJ doesn't need to change its policy much now. What needs to change is fiscal policy," Iwata said. "Fiscal and monetary policies need to work as one, so that more money is spent on fiscal measures and the total money going out to the economy increases as a result,"
"That's the only remaining policy option."
Iwata interview with Reuters
