The Bank of Japan may need more time to achieve its 2 percent inflation target and the country can’t ignore harm caused by an abrupt weakening of the yen, said Toshiro Muto, a two-time contender to lead the BOJ.
“The hurdle is pretty high to meet the price goal within their targeted time period of about two years,” said Muto, 71, a former deputy governor who is now the chairman of the Daiwa Institute of Research. “It’s a realistic approach to push back the timing.”
Even as the currency’s decline to a six-year low against the dollar swells Japan’s import bill, price gains in the world’s third-largest economy have slowed to 1.1 percent. Companies surveyed by the central bank forecast inflation lower than the BOJ’s goal for the next five years.
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