BANK of Japan (BOJ) Deputy Governor Kikuo Iwata said yesterday the timing for achieving the bank’s 2 percent inflation target has been “somewhat delayed” from its initial projection.

    But he said that with the underlying trend of inflation improving steadily and wages on the rise, Japan will likely hit 2 percent inflation around the first half of next fiscal year, beginning in April.

    “At this moment, the BOJ has no intention of changing its commitment of achieving its price target at the earliest possible time,” he told business leaders in Sapporo, in the northernmost Japanese prefecture of Hokkaido.

    In a news conference, Iwata acknowledged that public perceptions of future price rises could be dampened if falling fuel costs and electricity bills slow overall inflation.

    “There’s a risk that if prices continue to fall for a long period of time, that will affect inflation expectations. The risk of that happening is small for now but we can’t rule this out completely,” Iwata said.

    The BOJ pushed back the timing for achieving its ambitious inflation target April 30, saying it now expects the goal to be met sometime around September next year.

    Many analysts still see that forecast as too optimistic and expect the bank to ease policy again later this year.

    The move also jars with the BOJ’s commitment that it will aim to achieve 2 percent inflation in “roughly two years.”

    Iwata, a former academic and an architect of the current stimulus program targeting base money, has been among those on the board who share Governor Haruhiko Kuroda’s optimism on the prospects for hitting 2 percent inflation.

    But minutes from the April 30 meeting showed three of the nine board members wanted to allow themselves more time to hit the target or water down the commitment.(SD-Agencies)