"The economy is a living thing and we don't know what will happen around the world"
- Shinzo Abe, Japanese Prime Minister
Japanese Prime Minister Shinzo Abe has for the first time suggested the possibility that the Japanese economy could struggle to achieve the ambitious target of 2% inflation within two years in case the global economy will continue decelerating. The latest data are adding to concerns that amid weak economic performance, expectations of inflation have yet to pick up significantly, suggesting the target may be more difficult to reach than Mr. Abe has imagined earlier. Meanwhile, during the upcoming policy meeting on April 4, the new Governor of the Bank of Japan is expected to announce more stimulus measures in order to boost growth and achieve 2% inflation goal as soon as possible.
"The economy is a living thing and we don't know what will happen around the world," Abe said today, answering a question from opposition lawmaker Seiji Maehara in parliament.
"Though Kuroda has pledged to achieve 2 per cent inflation, given Japan's reality, this is an extremely tough goal" and Abe is aware of that, said Mikihiro Matsuoka, chief economist at Deutsche Securities Inc. in Tokyo. "Under the target, the BOJ will keep expanding stimulus and its actions will help to weaken the yen, boost profits and stimulate economic growth - that's what Abe may want to see ultimately."
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