Tokyo To Revise Deal With BOJ To Make Price Target Flexible

The Japanese government is set to revise a decade-old accord with the Bank of Japan (BOJ) that states the central bank will aim to achieve its 2 percent inflation target "at the earliest possible time," government sources said, Kyodo News reported.

Photo Insert: Under Kuroda, the BOJ remains committed to keeping borrowing costs at rock-bottom levels for households and businesses to support the economy, swimming against the global tide of monetary tightening.

In the first review since the joint agreement was made in 2013, the government will consider making the price goal more flexible, the sources said. Prime Minister Fumio Kishida is expected to work out details with the next BOJ governor, who will succeed Haruhiko Kuroda in April.

The envisaged revision could lead the BOJ to tweak its bold monetary easing as the side effects of its ultralow interest rate policy, most notably the yen's sharp depreciation against other major currencies, have become more evident and pose a challenge for the Kishida administration, Mainichi Shimbun also reported.

Under Kuroda, the BOJ remains committed to keeping borrowing costs at rock-bottom levels for households and businesses to support the economy, swimming against the global tide of monetary tightening.

The joint statement, which mentions the roles of the government and BOJ to support economic growth, is widely seen as forcing the bank to stick to its inflation goal. The revision is aimed at widening policy options for the BOJ, according to the sources.

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