Liberal Democratic Party (LDP) President Shinzo Abe said he wants someone in support of his party’s 2 percent inflation target to assume the Bank of Japan leadership, while promising to decide next fall whether to implement the consumer tax hike, following his party’s sweeping victory in the House of Representatives election on Dec. 16.
During TBS Radio and other programs on the evening of Dec. 16, Abe remarked about successors to the BOJ governor and deputy governor, whose terms will expire next spring, saying, “I want those who support the LDP’s consumer price increase target of 2 percent to assume those posts.”
Abe also stated that the government’s Council on Fiscal and Economic Policy, which has been suspended since the Democratic Party of Japan (DPJ) took the reins of government in 2009, will be resumed, with the BOJ governor taking part in its discussions. Abe showed a desire to make the council a forum for lifting Japan out of its ongoing deflation by calling on the BOJ to implement radical monetary easing measures.
The BOJ had earlier decided to maintain monetary easing measures until the consumer price is certain to increase by 1 percent from the previous year. Now that Abe has mentioned the conditions for the BOJ governorship, the central bank will effectively be forced to adopt an even more powerful monetary relaxation policy, including its purchase of an increased amount of long-term government bonds.
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