BOJ can shelve its inflation goal - Economic adviser to PM Abe

Koichi Hamada, an economic adviser to Prime Minister Shinzo Abe on Friday said the Bank of Japan can do away with its 2 percent inflation target or suspend efforts to achieve it once the job market is tight enough because the public is better off having prices fall, not rise. 

Key quotes (Source: Reuters)

Prices don’t need to rise much. From the perspective of people’s livelihood, what’s more desirable is for prices to fall, not rise.

I think it can be abandoned. It isn’t absolutely crucial.” He added that the “appropriate target level of inflation can be decided by the central bank.

The inflation target is useful “only as a tool for achieving full employment”. 

Since the world economy faces substantial turbulence, the BOJ can wait (in changing) its policy stance.

Demand is exceeding supply now. As long as this trend continues, we don’t need to worry too much.

If Japan cannot raise the sales tax when the job market is as favorable as now, it’s hard to see when it can ever raise the tax.