Some Bank of Japan Policy Board members told a meeting last month that a major boost in government spending and an active foreign exchange policy are needed to quickly overcome deflation, according to minutes released Wednesday.
"Some members said that to make the inflation rate positive within a relatively short period, substantially expanding fiscal spending or conducting an active foreign exchange rate policy would have to be considered as policy options," the minutes say.
If an inflation target were set by the central bank alone, the members said, it would "not be credible" because fiscal and foreign exchange policy is under the control of the Finance Ministry, not the BOJ, the minutes say.