Abe adviser fears BOJ has den of conspirators opposing reflation

27-Apr (Bloomberg, via JapanTimes) — The Bank of Japan appears to be wavering in its commitment to unprecedented monetary easing, said Kozo Yamamoto, an adviser to Prime Minister Shinzo Abe and an advocate of reflationary policies.

“I’m worried the BOJ’s attitude is wavering,” Yamamoto said in an interview in Tokyo on Friday. “I wonder if Kuroda is being affected by fukumaden,” he said, which translated means “a den of conspirators.”

Yamamoto made the remarks after Gov. Haruhiko Kuroda signaled confidence that consumer price gains remain on track for a 2 percent target, even as inflation ground to a halt by the bank’s key gauge. The Abe administration is pursuing a strategy of shock therapy to revive the world’s third-biggest economy with steps including record purchases of government debt by the central bank.

Abe’s government and the BOJ agreed in January 2013 to set a 2 percent inflation target. Kuroda took over in March that year and unleashed unprecedented monetary easing the following month. The inflation target is not laid out in the current BOJ law.

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PG View: For 20-years Japan has been ringing up the debt and printing yen with abandon, but rather than blaming the bad policy, let’s get paranoid and blame a ‘den of conspirators’.