Asian Development Bank President Haruhiko Kuroda, who has been nominated by Prime Minister Shinzo Abe to become the next Bank of Japan governor, told a Lower House confirmation session Monday that he will do anything he can to get Japan off its deflation path and that he would like to achieve a 2 percent inflation target in two years.
Given his record, his statements are not surprising. Mr. Kuroda, who served as finance vice minister for international affairs from 1999 to 2003 before becoming the ADB head in 2005, has called for setting an inflation target for many years and has criticized the BOJ for its failure to end the deflation of the past two decades.
But achieving a 2 percent inflation should not become the ultimate goal of the central bank and the government. The ultimate goal of the BOJ and government leaders should be to increase employment, raise the general level of wages for workers and promote economic activitites that are underpinned by people's greater disposable income.