Bank of Japan Governor Haruhiko Kuroda said he was won over to the idea of inflation targeting by Takatoshi Ito, an economist who has pushed for stronger governance at the world’s biggest pension fund.
Kuroda credited Ito for convincing him nearly 15 years ago that targets can be effective in clarifying responsibility and independence for central banks and stabilizing expectations, he wrote in an article in the monthly Japanese magazine Chuokoron. This led him to endorse the policy in a 2002 opinion piece, Kuroda wrote.
Ito was a deputy to Kuroda at the finance ministry in 1999 and 2000, when Kuroda was in charge of currency policy as vice finance minister for international affairs.
Kuroda wrote the opinion piece on inflation targeting with Ito’s successor, Masahiro Kawai, in which they urged the BOJ to adopt a 3 percent goal and increase the monetary base through asset purchases.
Since becoming governor in March 2013, Kuroda has pursued an unprecedented asset-purchase program aimed at pulling Japan out of two decades of economic stagnation and achieving a 2 percent inflation target.
Ito, who pushed for better governance at the Government Pension Investment Fund, this year took up a position at Columbia University.
Ito “is likely to continue to have a large influence on Japan’s economic policy,” Kuroda wrote.