Japan ‘Behind’ in Fighting Deflation as Fed Gears Up

The Bank of Japan’s inflation forecast shows it won’t meet its own guidelines for price stability, a prediction that signals policy makers haven’t pumped enough cash into the economy.

Governor Masaaki Shirakawa and his board yesterday left the size of an asset-purchase fund at 5 trillion yen ($61 billion) even after its introduction failed to stem gains in the yen. At the same time, policy makers predicted consumer prices will rise 0.6 percent in fiscal 2012, little more than half the 1 percent median definition of price stability of board members.