TOKYO (MNI) – Bank of Japan Governor Masaaki Shirakawa on Friday
said there is a long way to go before Japan can see clear prospects for
price stability of around 1% annual inflation measured by the CPI.
He also told reporters at the Japan National Press Club that
setting a price goal of achieving 2% CPI gains in the long term would
“cause uncertainty among businesses and households,” as the economy has
never seen its inflation rate sustained at such a high level.
During his speech, he repeated his mantra that in order to help
beat years of deflation, Japan must raise its economic growth potential
by boosting overall productivity and providing new supplies to match new
demands in the fast-aging society.
The governor repeated his previous remarks that the strong yen has
a negative impact on Japan’s export-led recovery in the short term,
overwhelming its longer-term benefit of boosting the economy’s
purchasing power.
He also stressed the BOJ’s oft-repeated pledge that it won’t buy
Japanese government bonds for the purpose of financing fiscal needs
while reminding that the BOJ has already been buying large amounts of
JGBs from markets.
tokyo@marketnews.com
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