BOJ Exec Says 2% Inflation Goal "In Sight"

The Bank of Japan's goal of achieving 2% inflation is "finally in sight" and it needs to "shift gears" from years of powerful monetary easing aimed at meeting the target, according to one of the central bank's board members, as reported by Kyodo News.

Market expectations have heightened that an end to the negative rate policy will come in March or April. I Photo: OiMax Flickr

Hajime Takata, who sits on the BOJ's nine-member Policy Board, cited options including ending the central bank's negative interest rate policy and bond yield-cap program.

His remarks, made during a meeting with business leaders in Shiga Prefecture, western Japan, are the latest signal that the BOJ is moving away from monetary easing. Market expectations have heightened that an end to the negative rate policy will come in March or April, as reported by Mainichi Japan.

"With monetary easing continuing, I believe we have reached a point where attainment of the 2 percent price stability target is finally in sight, despite uncertainty over the Japanese economy," Takata said.

"It is necessary to consider shifting gears from extremely powerful monetary easing...and how we should respond nimbly and flexibly toward an exit," he added.

The BOJ sets short-term interest rates at minus 0.1% and allows 10-year Japanese government bond yields to rise above 1.0%. In recent months, the central bank has gradually loosened its grip on long-term rates, long depressed at rock-bottom levels under a framework known as yield curve control.

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