An overwhelming majority of Bank of Japan policymakers in 2002, including then-Gov. Masaru Hayami, opposed introducing an inflation target, the minutes of a policy meeting covering July to December 2002 showed Tuesday.
“Such a policy is not appropriate, as it would expose the economy to a reckless gamble,” Hayami said at a policy meeting on Dec. 17, 2002, at a time when the government of former Prime Minister Junichiro Koizumi accelerated efforts to eliminate massive amounts of nonperforming loans held by banks.
The economic and fiscal policy minister at the time, Heizo Takenaka, had called on the BOJ to introduce an inflation target with an aim to promote drastic monetary easing.
At a meeting on Oct. 11, Deputy Gov. Sakuya Fujiwara said it was uncertain that setting an inflation target would be effective to beat deflation, adding that he believed participants of the meeting agreed that the introduction of an inflation target would instead bring more adverse effects.
Not only BOJ policymakers but also an official from the Finance Ministry expressed a negative view, with then-Senior Vice Finance Minister Takayoshi Taniguchi saying, “I myself believe it is undesirable and a majority in the Finance Ministry thinks that way.”