By Yoshifumi Takemoto and Leika Kihara
TOKYO (Reuters) – A group of academics and business executives on Monday urged the Bank of Japan (BOJ) to cut inflation to 2 percent. Goals as long-term goals – long-term goals, not goals that must be achieved soon, given the rising costs of long-term monetary easing.
In the proposal, the panel also called for interest rates to rise more in line with economic fundamentals and to normalize the functioning of the Japanese bond market.
Among the candidates to be the next BOJ vice-governor, she told a news conference.
“By targeting 2 percent inflation in the long run, the BOJ can make its monetary policy more flexible,” she said.
The panel’s proposals come ahead of the BOJ’s leadership transition, with Governor Haruhiko Kuroda’s term ending in April and his two deputies The term will end in March.
Markets have been betting the central bank will soon begin phasing out its aggressive stimulus measures as core consumer inflation in Japan hits a yearly high of 4%, double the BOJ’s target and bond yields.
