The Bank of Japan should abandon its two-year time frame for achieving 2 percent inflation to avoid the pressure of having to take more drastic measures to reach the distant goal, a former BOJ executive director has said.
"It's already conducting very bold stimulus," Kazuo Momma, who stepped down from his position at the central bank on May 31, said in a recent interview. "If they deploy more policies that defy common sense, they'll need to do a certain amount of explaining and, above all, it will be difficult to discern the pros and cons."
While Gov. Haruhiko Kuroda remains far from his price target after more than three years of unprecedented asset purchases, he has repeatedly said his aim is to meet the goal "at the earliest time possible with a time horizon of about two years." This has fueled a cycle of easing expectations before each BOJ policy meeting, which in most cases end with no change in policy.