Bank of Japan Governor Haruhiko Kuroda gave himself two years to do “whatever it takes” to end deflation and revive the world’s third-largest economy. He may have less than half that time to produce results.
The Bank of Japan could usher in a growth spurt unseen in a generation by stepping up stimulus and ending deflation, according to Haruhiko Kuroda, the head of the Asian Development Bank and a potential contender for BOJ chief.
Japan’s debt yields are the lowest in seven months relative to its major economic peers as a surprise contraction in the world’s third-largest economy cements expectations the central bank will print more money.
The Bank of Japan expanded its asset-purchase program for the third time in four months, and will reconsider its objectives for inflation as incoming Prime Minister Shinzo Abe urges more action to end price declines.
A decade and a half after Japan slumped into deflation, the central bank is set to signal its strongest effort yet to reverse the trend. The biggest challenge may be that the nation has come to rely on falling prices.
Japan’s incoming Prime Minister Shinzo Abe backed the central bank when it raised interest rates in 2006, a move he now says was a mistake. His shift may signal less tolerance for deflation in the third-largest economy.