The Bank of Japan will likely find it easier to make its inflation target less binding if recent scandals throw Prime Minister Shinzo Abe from power, according to Takahide Kiuchi, a former board member at the central bank.
"If the unusually strong administration changes, the Bank of Japan could get a little more freedom," Kiuchi said in an interview Tuesday. The BOJ has faced "considerable political pressure" these past five years, added.
"If the Abe administration is replaced by another administration, it could become easier" to reframe the inflation target as a medium- to longer-term goal, said Kiuchi, 54, who is now executive economist at Nomura Research Institute Ltd. in Tokyo. The BOJ, which is by law independent from the government, has said it wants to reach its price goal at the earliest possible time.