BOJ’s Kuroda defends 2% inflation target

Bloomberg

Bank of Japan (BOJ) Governor Haruhiko Kuroda said he’s still seeking to deliver 2 percent inflation after the government voiced support for a more flexible approach to the goal, which hasn’t been hit in a decade.
Japan must reach 2 percent to achieve a self-sustaining cycle of economic growth, where higher corporate profits and wages fuel consumption and investment, Kuroda said after a BOJ board meeting, when policy makers maintained stimulus while downgrading their economic assessment.
“The 2 percent target is something that the Bank of Japan’s policy board has decided by itself,” Kuroda said. “We think that making this a reality is necessary to achieve the BOJ’s mission of price stability.”
With policy side effects piling up after six years of stimulus, and a growing global debate over price targets, the BOJ faces calls to rethink its commitment to 2 percent — which many economists deem unrealistic. The central bank has repeatedly pushed back its forecast date for hitting that goal, which Kuroda first predicted would happen within about two years.