BoJ is clear on its commitment to bring inflation “stably exceeds” 2% target. But board member Asahi Noguchi criticized, “personally, I don’t think this commitment has a strong effect in changing inflation expectations”
“It may take some time, but a more realistic policy would be to maintain the current powerful monetary easing to steadily improve the output gap, so that demand increases enough to prop up wages and inflation”, he added.
He’s also an advocate to push bond yield target to 15- to 20-year bonds. In particular, if a shock event pushes the economy into a serious downturn, BoJ should ease further “without hesitation”. “What’s important is to look at the basic trend of the economy, “he said. “Unless this trend is broken, it’s important to patiently sustain the current very powerful monetary easing.”
