BOJ Must Shift to Wage Growth Target, Price Professor Says

Japan’s central bank must take an unusual step to prevent a return to deflation, according to a professor who tracks prices at the University of Tokyo.

The Bank of Japan should scrap its 2 percent inflation target and replace it with a goal for higher wages, said Tsutomu Watanabe, the professor of economics behind the UTokyo Daily Price Index. More quantitative easing would be pointless, he said. Shifting from prices to pay would require a change in the 2013 joint agreement between the bank and the government.