BOJ Masai: Maintain Easing Toward 2% Inflation Target

     MATSUYAMA, Japan (MNI) - The Bank of Japan must continue implementing

monetary easing to secure the path toward its increasingly evasive 2% inflation

target and informing the public what is preventing the bank from reaching the

goal, board member Takako Masai said Thursday.

     In a speech to business leaders in Matsuyama City, western Japan, Masai

said she is aware or the criticism about the central bank as it has delayed its

estimated timing of hitting the target several times since it began aggressive

easing more than four years ago.

     "The bank certainly aims to achieve the price stability target of 2% at the

earliest possible time, and the delay in such timing is not desirable," she

said.

     "However, what I believe is important for the bank is -- in the event that

the 2% price stability target cannot be achieved due to economic and price

developments at the time -- to thoroughly explain the reasons behind the target

not being achieved and to implement monetary policy so that the economy will

follow a path toward the target."

     She added that the policy framework of inflation targeting is also expected

to "perform the role of a communication tool."

     Masai repeated the bank's official line that there are brighter spots in

the economy that are likely to turn around the stubborn deflationary mindset

among households and businesses.

     "There is still a long way to go to achieve the price stability target of

2%. Nevertheless, my view is that the momentum toward achieving the target has

started to steadily increase.

     Masai joined the nine-member BOJ policy board in June 2016 after serving as

an executive officer overseeing market research at Shinsei Bank.

     At its latest policy meeting on July 19-20, the BOJ board decided to leave

its monetary policy unchanged in a seven-to-two vote, retaining the yield curve

control target it adopted in September last year, while pushing back its

estimate for achieving its 2% inflation target by a year until "around fiscal

2019." It was the sixth delay since April 2013 when the bank launched aggressive

easing.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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