TOKYO: Economics Minister Akira Amari warned that it would be premature for the Bank of Japan (BoJ) to consider an exit strategy from its massive stimulus programme, voicing hope instead for further monetary easing if achievement of its inflation goal falls behind schedule.
Amari also said while Japan appears to be emerging from years of persistent price declines, it was too early to formally declare a sustained end to deflation with the economic recovery still vulnerable to external shocks.
“The BoJ has expressed strong determination that it won’t hesitate to take further action if (the timing for meeting the inflation target) is not on schedule,” Amari said.
The central bank has kept policy unchanged since deploying an intense burst of monetary stimulus in April last year, when it pledged to double base money via aggressive asset purchases to accelerate inflation to two per cent in roughly two years.
With Japan only halfway to meeting that target, the BoJ is set to keep its stimulus plan intact well into next year, in contrast to its United States and British counterparts, which are starting to telegraph plans for interest rate hikes.
But BoJ officials have become more comfortable speaking about the chance of a future exit from quantitative easing.
They have also shown no intention of expanding stimulus any time soon on their conviction that Japan is making steady progress in meeting the price goal. Reuters
