"It will be difficult for the BOJ to slow its easing, but those concerns are still far away"
- Tomo Kinoshita, chief economist at Nomura Holdings Inc.
The Bank of Japan will have to slow its stimulus measures in case the appreciation of goods and the nation's currency go too far, according to Koichi Hamada, who's advising Prime Minister Shinzo Abe. The BoJ is widely expected to announce more stimulus measures later this week to help the recession-struck economy escape from years of falling prices known as deflation. Shinzo Abe already claimed his readiness to inject 10 trillion yen ($112 billion) into the world's third largest economy and raise the inflation target to the 2% level. However, it can be difficult to slow its easing, pushing the economy towards significant inflation.
"It will be difficult for the BOJ to slow its easing, but those concerns are still far away," said Tomo Kinoshita, chief economist at Nomura Holdings Inc. in Tokyo. "They need to concentrate on getting out of deflation, and we can worry about inflation later."
"The BOJ will do what it has to do to reach a price stability target of 2 percent," said Economy Minister Akira Amari. "The government has a responsibility to do what it has to do to achieve growth and fiscal consolidation" to prevent a loss in confidence in the nation's debt, he said, adding that "both sides are coming closer to agreement."
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