Amari voiced confidence that Japan can achieve the BOJ’s ambitious goal of accelerating inflation to 2 percent early next year, but added that all three arrows of “Abenomics” – fiscal and monetary stimulus as well as an aggressive growth strategy – must all be deployed to ensure success.
“The BOJ still has a role to play and it remains primarily responsible (for achieving its price target). But the government can’t sit idly by,” he told Reuters in an interview on Wednesday.
Amari said it was up to the BOJ to decide if and when to ease policy further, sidestepping questions on whether it should expand stimulus if the impact of the sales tax hike next month proves bigger than expected, or if its price target appears difficult to achieve.
But he said that surprising markets with the timing and scale of its action is one way the BOJ can maximise the effect of any further policy steps it takes in the future.
“It’s among the skills of a BOJ governor to surprise markets in a good way,” he said.
The BOJ has stood pat on policy since launching an intense burst of stimulus last April, when it pledged to accelerate inflation to 2 percent in roughly two years via aggressive asset purchases in a country mired in deflation for 15 years.
Markets are rife with speculation that the BOJ will expand monetary stimulus again in coming months to cushion the pain from a sales tax hike to 8 percent in April, which is set to hit private consumption even before exports pick up.
(Reporting by Yuko Yoshikawa and Leika Kihara in Tokyo)
