The Bank of Japan's decision to target the yield curve and allow consumer prices to overshoot its 2 percent goal are welcome steps in the nation's long battle to encourage inflation, former U.S. Treasury Secretary Lawrence Summers has said.

Targeting the yield curve will keep interest rates low enough to encourage government borrowing, which is needed to help support the economy, Summers told reporters at a seminar hosted by the BOJ.

The BOJ's commitment to overshoot its price target should encourage inflation expectations and is something other central banks should consider, said Summers, now an economics professor at Harvard University.