In its half-yearly Outlook for Economic Activity and Prices report on April 26, the Bank of Japan predicted that fiscal 2015 will achieve a 1.9 percent rise in the consumer price index, following a 0.7 percent rise in fiscal 2013 and a 1.4 percent rise in fiscal 2014, showing the BOJ’s view that its goal of achieving a 2 percent inflation is within reach.

But the BOJ should not stubbornly stick to the 2 percent inflation goal. It will be deprived of flexibility in its monetary policy. It could also cause undesirable side effects. A May 3 summary report on the April 3 and 4 discussions by the nine BOJ Policy Board members shows that some board members feared negative effects of massive monetary easing on banks, life insurance companies and the function of the market itself.

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