Business / Economy

BOJ has room for more stimulus, top Abe adviser says


Koichi Hamada, a retired Yale University professor advising Prime Minister Shinzo Abe, says the Bank of Japan can add to already unprecedented stimulus if necessary to drive an economic revival.

BOJ Gov. Haruhiko Kuroda “should continue to trust in his judgment and ease further” if needed, said Hamada, 77, who was tapped by Abe last year to advise on monetary policy. A stock slump was “a natural correction” and “Abenomics” is working “as well as or better than expected,” Hamada said.

The economy grew the most in a year last quarter and the yen fell past 100 against the dollar this month, boosting exporters such as Mazda Motor Corp.

Abe’s challenge now is to implement structural reforms to maintain a recovery threatened by volatile bond yields and a stock market that last week plunged the most in two years.

The BOJ pledged in April to double bond buying in an attempt to secure 2 percent inflation and drag the economy out of its 15-year deflationary malaise. Policy Board member Ryuzo Miyao said Tuesday that the bank has taken all necessary steps for now.

In March, Hamada endorsed a yen level of 98 to 100 per dollar even as he said he was scolded by the government for similar remarks that risked friction with Group of 20 nations. On Tuesday, he said a level of 100 may make Japanese industry competitive.

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