Economics
Japan’s Central Bank Is Halfway to Its Inflation Target
- Surging currency underscores BOJ at mercy of external events
- Underlying inflation trend still weak at best, economists say
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Japan’s key inflation gauge ticked up in February, putting the Bank of Japan halfway to its goal of 2 percent. Yet a strengthening yen and the threat of a global trade war underscore the central bank’s vulnerability to global markets and events.
Despite the progress made, inflation remains far from the BOJ’s target, while the yen’s 7 percent gain so far this year has raised the risk of price gains stalling. Even a modest decline in oil prices would work against the central bank, which blamed a price collapse in 2014 for its struggles to generate inflation.