Bank of Japan Review Likely to Defend Massive Stimulus Programme

by Leika Kihara
Reuters UK

The Bank of Japan has already prepared a preliminary outline of a “comprehensive” review of its policies due next month that will maintain a pledge to hit its 2 percent inflation target as soon as possible, sources familiar with its thinking said.

In the draft, the BOJ identifies sharp falls in oil prices, a prolonged hit to growth from a sales tax hike in 2014 and Japan’s inability to shake off its deflationary mindset as hampering achievement of its inflation target, the sources said.

By blaming external factors for keeping inflation subdued, the BOJ could use the review to defend its policy framework from rising criticism that three years of heavy money printing had failed to achieve its price target, they added.

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