A group of ruling party lawmakers called on the Bank of Japan to set an inflation target of above 2 percent and asked the government to name central bank board members who favor the move when two seats open up in April.
“People determined to introduce inflation targets should be appointed,” Sumio Mabuchi, a leader of the Democratic Party of Japan group, said in an interview today in Tokyo after submitting its proposal to DPJ policy chief Seiji Maehara. Yochi Kaneko, another lawmaker, said the group plans to propose candidates “in a week or so.”
BOJ Governor Masaaki Shirakawa and board members on Feb. 14 set an inflation “goal” of 1 percent, after previously stating that their understanding of price stability was gains of between zero and 2 percent, centered on 1 percent. The bank also unexpectedly increased its asset-purchase program by 10 trillion yen ($123 billion) to 30 trillion yen.
Ruling and opposition lawmakers have criticized Shirakawa for falling short in his efforts to reverse the yen’s rise to a postwar high and end more than a decade of falling prices. Prime Minister Yoshihiko Noda opposes calls to change laws governing the BOJ to allow more political oversight, while calling for more “bold” central bank action. The yen has fallen 3.2 percent against the dollar since Feb. 14.
The group of about 70 legislators called on the central bank to introduce further monetary easing at its March 12-13 policy board meeting.
Such a move two months in a row would be “epoch-making,” Mabuchi said, and give a clear signal the BOJ is committed to inflation targets like central banks in other countries. The bank should undertake more purchases of long-term government bonds in March, when many companies close their books, the group’s statement said.
Maehara told the group his aims “are exactly in the same direction,” leader Sakihito Ozawa told reporters after the meeting. Maehara in a June 2011 interview said the Bank of Japan “can expand its balance sheet a little more” to aid the recovery from last March’s earthquake and nuclear disaster.
The terms of two of the bank’s policy board members, Seiji Nakamura and Hidetoshi Kamezaki, will expire on April 4. Parliament must approve the government nominees.
Mabuchi, a former transport minister, said one new member should be a former president of an exporting company who understands the “pain” of the yen’s rise.