The Bank of Japan's governor Haruhiko Kuroda has said that policy may be adjusted before the two per cent inflation target is reached if there are signs that other macro indicators are improving rapidly. This sets out a more flexible approach to an inflation target which has previously been considered as a concrete objective of Japanese economy policy. Achieving a two per cent rate of inflation has been a key plank of Prime Minister Shinzo Abe's policy goals.
It may be the case that discussions of the risks of radical monetary easing, including the blowing of asset bubbles that could scare off investment, has persuaded officials to consider holding back. Japan's finance minister Shunichi Yamaguchi has declined to comment on the strength of yen and said that Japan will work on fiscal reform.