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Shirakawa Vows Aggressive Easing as Price Goal Still Out of View

November 12, 2012

Bank of Japan (8301) Governor Masaaki Shirakawa said a 1 percent inflation goal introduced in February is still distant, underscoring the central bank’s struggle to reverse a decade of deflation.

“The bank is committed to continuing with aggressive monetary easing,” as the price goal is not yet in sight, Shirakawa said today in a speech in Tokyo. The BOJ will continue with its policy until 1 percent inflation is in view, he said.

The bank has added to monetary stimulus four times this year, including the first back-to-back monthly stimulus expansion -- in September and October -- since 2003. Pressure remains on it to do more to to boost growth and end deflation as the nation’s economy shrank the most since last year’s earthquake in the third quarter and consumer prices excluding fresh food fell for a fifth month in September.

Two weeks ago the BOJ announced 11 trillion yen ($138 billion) in additional asset purchases, an unlimited new lending support program, and signed a joint statement with the government on overcoming deflation. The bank forecast last month that prices would rise 0.8 percent in the fiscal year starting in April 2014.

“CPI may turn positive in fiscal 2014, however, it will probably very far from the BOJ’s price goal,” said Hiroaki Muto , a senior economist at Sumitomo Mitsui Asset Management, in Tokyo. “The BOJ may need to apply more monetary stimulus at its December meeting.”

To contact the reporter on this story: James Mayger in Tokyo at

To contact the editor responsible for this story: Paul Panckhurst at

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