Japan can retain its decade-old blueprint focusing on efforts to beat deflation even if the central bank were to phase out its massive stimulus with an end to negative interest rates, said the government¡¯s chief economist Tomoko Hayashi.
Under pressure from then-Prime Minister Shinzo Abe to take bolder steps to beat deflation, the Bank of Japan signed a joint statement with the government in 2013 and committed itself to achieve its 2% inflation target ¡°at the earliest date possible.¡±
The pledge served as the backbone of former BOJ Gov. Haruhiko Kuroda¡¯s radical monetary stimulus and justification for keeping Japan¡¯s interest rates ultralow.
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