The Bank of Japan should set a more achievable inflation target to avoid getting stuck with endless stimulus, according to a former deputy governor.
"It’s about time the BOJ set a realistic price goal rather than rigidly targeting 2%,” said Hirohide Yamaguchi, who left the bank in 2013, just before Gov. Haruhiko Kuroda took the helm. "We can’t see the prospect of inflation reaching it, even after more than eight years.”
Yamaguchi, the right-hand man under Kuroda’s predecessor Masaaki Shirakawa, said the central bank can instead accept a lower inflation goal and could start winding down stimulus even if the yen strengthened thanks to improved resilience among firms.