Kikuo Iwata, Bank of Japan deputy governor nominee, said Tuesday the central bank can end deflation solely through buying government debt and doesn't need to purchase riskier assets to meet its inflation target.
"If we buy long-term bonds, we can achieve 2 percent inflation within two years," Iwata, 70, an economics professor at Gakushuin University in Tokyo, said at an Upper House parliamentary confirmation hearing. "We need decisive easing."
Investors are assessing the likely strength of monetary stimulus from the BOJ after Gov. Masaaki Shirakawa and his deputies step down on March 19. Iwata's comments come after Prime Minister Shinzo Abe's nominee for governor, Haruhiko Kuroda, said Monday that the bank would consider buying derivatives and signaled a readiness for a quick expansion in monetary stimulus.