Despite BOJ’s 2% Inflation Target, Prices Still Short

Four years after the Bank of Japan set a 2 percent inflation target, price gains may still be coming up short, according to a survey of economists by Bloomberg News.

Consumer prices will rise an average 1.4 percent the fiscal year through March 2017, after failing to reach 2 percent — stripped of fresh food and a sales-tax boost — in any of the years since the goal was set, the median of 16 estimates shows. Governor Haruhiko Kuroda wanted to get there in about two years when he unleashed his record stimulus plan in April 2013.

Japan, the first major developed nation to battle deflation since the 1930s, has debated whether and how to boost prices since they started dropping in the 1990s. Sustained failure to reach the target would undermine an argument by Kuroda and one of his two deputies that monetary policy alone could do the job.

Bloomberg

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