More than a year after securing support at the Bank of Japan for unprecedented monetary stimulus, Governor Haruhiko Kuroda has yet to persuade most board members that they have the power to achieve their inflation target.
A majority of the nine members disagree with Kuroda’s view that flooding the economy with cash is sufficient to get stable 2 percent gains in consumer prices, according to people familiar with their thinking. Most conclude it cannot be done without government steps to raise Japan’s growth potential, they said, asking not to be named because the discussions are private.
The ideological gap, masked in public remarks by most board members, underscores why some reflationist lawmakers are still pushing for legislation that would hold the BOJ responsible for delivering on its target. Debate may become more public should calls for expanded asset purchases escalate in face of inflation falling short of the goal next year.