"Sometime within the next five years, we will reach [our] 2 percent inflation target," Governor Haruhiko Kuroda told CNBC's Sara Eisen over the weekend. Once that level is reached, we will start "discussing how to gradually normalize the monetary condition."
Inflation remains low. Japan reported its consumer price index, excluding fresh food and energy, rose half a percent in the 12 months through March.
"In order to reach [our] 2 percent inflation target, I think the Bank of Japan must continue very strong accommodative monetary policy for some time," Kuroda added in his interview with CNBC.
Protectionism, unexpected rapid tightening of monetary policy in some countries, and geopolitical tensions in North Korea and the Middle East pose potential risks, Kuroda said.
It's pretty amazing how Japan has failed to destroy its currency despite decades of trying. Once again, I repeat my foolproof plan to cure low inflation in Japan.
Mish’s Four Pronged Proposal to End Japanese Deflation
- Negative Sales Taxes
- One Percent Tax, Per Month, on Government Bonds
- National Tax Free Lottery
Why wait another five years?
Mike "Mish" Shedlock