 "Bank of Japan delays inflation goal in blow to 'Abenomics'")
Japan's central bank on Tuesday again pushed back the timeline for hitting its inflation goal, the latest policy change that has raised questions about attempts to revive the deflation-plagued economy.
The Bank of Japan has for the past three years embarked on a bond-buying stimulus programme to try to keep interest rates ultra-low and increase borrowing and spending.
The scheme was introduced by BoJ governor Haruhiko Kuroda in conjunction with a government spending drive which Prime Minister Shinzo Abe hoped would drag the economy out of years of torpor.
It also leaves the next move up to Kuroda's successor as the target date is almost a year after his term ends.
Abe hand-picked Kuroda to help drive his 'Abenomics' growth blitz of big spending, easy money and structural reforms, unveiled in early 2013.
The programme sharply weakened the yen -- fattening corporate profits -- and set off a stock market rally that spurred hopes for a once-soaring economy caught in a spiral of falling prices and lacklustre growth.
But more than three years later growth remains fragile while inflation is far below the BoJ's target. Data last week showed consumer prices fell in September for a seventh straight month.
"What we're seeing now is nowhere near what the bank had said would happen," said Tsuyoshi Ueno, senior economist at NLI Research Institute in Tokyo.
"Their initial projection was not very good."
The BoJ hoped that consumers would spend more if prices were rising, persuading firms to expand operations and getting the world's number three economy humming.
But wage growth has fallen below expectations, meaning workers have less money to spend. Abe's promises to cut through red tape -- the key third plank of Abenomics -- have also been slow in coming.
In forex trading the dollar was at 104.77 yen, slightly off 104.82 yen in New York yesterday.
Japan's central bank also cut back its consumer price forecast for the current fiscal year ending March 2017 and for the subsequent two years.
The move is the latest policy tweak. In September the bank revealed it would switch its focus to 10-year government bonds and pledged to keep its yield around zero, by buying as few or as many as necessary.
The Bank of Japan has for the past three years embarked on a bond-buying stimulus programme to try to keep interest rates ultra-low and increase borrowing and spending.
The scheme was introduced by BoJ governor Haruhiko Kuroda in conjunction with a government spending drive which Prime Minister Shinzo Abe hoped would drag the economy out of years of torpor.
More From This Section
But in a fresh sign that authorities are still struggling, the bank said it now expects to hit two % inflation by March 2019 -- four years later than its original target and the latest in a string of delays.
It also leaves the next move up to Kuroda's successor as the target date is almost a year after his term ends.
Abe hand-picked Kuroda to help drive his 'Abenomics' growth blitz of big spending, easy money and structural reforms, unveiled in early 2013.
The programme sharply weakened the yen -- fattening corporate profits -- and set off a stock market rally that spurred hopes for a once-soaring economy caught in a spiral of falling prices and lacklustre growth.
But more than three years later growth remains fragile while inflation is far below the BoJ's target. Data last week showed consumer prices fell in September for a seventh straight month.
"What we're seeing now is nowhere near what the bank had said would happen," said Tsuyoshi Ueno, senior economist at NLI Research Institute in Tokyo.
"Their initial projection was not very good."
The BoJ hoped that consumers would spend more if prices were rising, persuading firms to expand operations and getting the world's number three economy humming.
But wage growth has fallen below expectations, meaning workers have less money to spend. Abe's promises to cut through red tape -- the key third plank of Abenomics -- have also been slow in coming.
In forex trading the dollar was at 104.77 yen, slightly off 104.82 yen in New York yesterday.
Japan's central bank also cut back its consumer price forecast for the current fiscal year ending March 2017 and for the subsequent two years.
The move is the latest policy tweak. In September the bank revealed it would switch its focus to 10-year government bonds and pledged to keep its yield around zero, by buying as few or as many as necessary.