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Japan ruling party group wants higher BOJ inflation goal
March 1, 2012 / 7:56 AM / 6 years ago

Japan ruling party group wants higher BOJ inflation goal

TOKYO, March 1 (Reuters) - A group of Japanese ruling party lawmakers on Thursday called for the Bank of Japan to more than double its inflation goal and aim to maximize employment in a sign that a surprise monetary easing last month has not diffused political pressure.

The 75-member group includes former cabinet members and wants the BOJ to set an inflation goal exceeding 2 percent, from 1 percent now, and be given a U.S. Federal Reserve-style objective of maximizing employment in proposals handed to Seiji Maehara, the Democratic Party of Japan’s policy chief.

“Some of our calls have come true earlier than expected,” said Sakihito Ozawa, a former environment minister who heads the group. He quoted Maehara as saying he too shares the group’s views.

The BOJ surprised markets on Feb. 14 with a 10 trillion yen ($123.6 billion) increase in its asset buying program and by setting an inflation goal of 1 percent in the face of political pressure.

Some politicians had threatened to revise a law protecting the BOJ’s independence unless it showed a stronger commitment to overcoming grinding deflation.

But pressure on the BOJ was presumed to have eased after the surprise move drove down the yen to a nine-month low against the dollar and pushed up share prices in the export-dependent economy.

Still, some analysts argue the BOJ may even face stronger pressure after the easing helped reverse yen strength.

“As the BOJ law revision looks more realistic, the BOJ may be pushed to ease policy further as early as in April-June,” said Hiromichi Shirakawa, chief economist at Credit Suisse.

$1 = 80.9400 Japanese yen Reporting by Rie Ishiguro; Editing by Ed Lane

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