2 November 2001, 09:56 LDP panel OK's BOJ law amendment for inflation target
TOKYO, Nov. 2 (Kyodo) - A ruling Liberal Democratic Party (LDP)
working group on Friday endorsed a proposed amendment to the Bank
of Japan (BOJ) Law that includes a provision to set an inflation
target, LDP officials said.
The provision calls on the central bank to consult with the
government on setting a desirable price inflation target and
present a time frame for achieving it, they said.
The amendment is designed to force the BOJ to ease monetary
policy further to get Japan out of its deflationary state,
according to the officials.
The LDP's financial research commission, to which the working
group is attached, is expected to finalize the bill after
consulting with other LDP lawmakers and coalition partners and will
submit it to the current Diet session, the officials said.
Financial analysts said the amendment could lead to the BOJ
directly underwriting government bonds and implementing other
excessively inflationary measures, and therefore it is doubtful if
it will be put into force
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