Incoming Prime Minister Shinzo Abe said Sunday his government, expected to be formed by midweek, will consider revising the Bank of Japan law if the central bank refuses to adopt the 2 percent inflation target he’s demanding at the next BOJ Policy Board meeting.
Abe, who has specifically called for a target of at least 2 percent, issued the warning on a TV program.
“We expect (the BOJ) to discuss it at the next Policy Board meeting” on Jan. 21 and 22, he said of his inflation-busting recommendation.
If the policymakers don’t give in, “we will revise the Bank of Japan law and set (the inflation target) by signing an accord with the BOJ,” Abe said, using veiled language to disguise his threat to strip the central bank of its independence.
The chief of the conservative Liberal Democratic Party, which won the Lower House election just over a week ago on a wave of discontent with the Democratic Party of Japan, repeated that the BOJ should commit to a specific inflation target to improve the labor market.
Since BOJ Gov. Masaaki Shirakawa’s term expires in April, the LDP will pick a successor who “agrees with our views” on monetary policy and seek cooperation from other parties, such as Nippon Ishin no Kai (Japan Restoration Party), which have similar stances on monetary easing, when Diet approval is needed to install the new central bank chief, he said.
On Thursday, the BOJ decided to once again expand its asset-purchasing program in a bid to halt the nation’s prolonged deflationary trend. The central bank also pledged to discuss at its next meeting whether to revise its stance on monetary easing by changing its wording from inflation “goal” to “target,” and to aim for a higher increase in consumer prices than the currently sought 1 percent increase in the consumer price index.
Meanwhile, the LDP is debating whether to deregulate the medical and nursing industries in an attempt to stimulate the economy.
Abe’s administration, to be launched following his expected appointment as prime minister in an extraordinary Diet session Wednesday, will also open a fresh investigation into the Fukushima nuclear crisis triggered by the massive quake and tsunami of March 2011.
The three probes so far conducted under the Democratic Party of Japan’s time in power have failed to clarify problems with the plant’s disaster prevention measures, as well as Tokyo Electric Power Co.’s emergency attempts to contain the disaster, Abe said.
While his administration still promises to make a decision within three years on whether to restart suspended nuclear power plants, it has agreed to give Diet approval to the November appointments of five members of the newly created Nuclear Regulation Authority that was set up by the Cabinet of Prime Minister Yoshihiko Noda, Abe said.
Mori visit to Russia
Incoming Prime Minister Shinzo Abe plans to send former Prime Minister Yoshiro Mori to Russia in February to pave the way for his own trip there, LDP party sources said.
Abe, who is eager to see progress on the longstanding territorial row with Russia, is banking on Mori’s close ties with Russian President Vladimir Putin to arrange a date, the Liberal Democratic Party sources said Saturday.
Abe and Putin have met on several occasions, including the Group of Eight leaders summit when he was prime minister from 2006 to 2007. Mori might be sent as a special envoy to arrange the new meeting, the sources said.
Japan and Russia remain at odds over the sovereignty of four Russia-controlled islands off Hokkaido: Etorofu, Kunashiri, Shikotan and the Habomai islet group. The dispute has prevented the countries from concluding a peace treaty and technically remain at war.
The islands — known as the Northern Territories in Japan and the Southern Kurils in Russia — were seized by the Soviet Union shortly after Japan’s surrender in World War II on Aug. 15, 1945.
Fresh from a landslide victory in the Lower House election last Sunday, Abe has expressed a desire to settle the issue and conclude a peace treaty with Russia.
On Thursday, Putin said at a news conference that Abe’s remarks sent a “very important signal” and added that he is ready to hold “constructive” talks with Japan’s new government.