Inflation targets won't halt deflation: former BOJ deputy

Toshiro Muto, former deputy governor of the Bank of Japan, said inflation targeting by the central bank would do little to end deflation, dismissing an effort by politicians to impose such a measure.

"There have recently been specific proposals to the central bank that it should adopt an inflation target to beat deflation," Muto, 67, said at a forum in Tokyo on Friday. "I don't think introducing an inflation target would stamp out deflation at all."

Prime Minister Naoto Kan is facing pressure from within his party as well as rival lawmakers to make the BOJ target specific inflation levels. Consumer prices have fallen for 16 straight months, and a rising yen threatens to contribute to deflation by lowering import costs.