Tuesday, March 12, 2013
Hyperinflation 'Unthinkable' Even With Bold Easing: Abe
TOKYO (Nikkei)--Hyperinflation is "unthinkable," Prime Minister Shinzo Abe said Monday, citing the Bank of Japan's ability to make adjustments after enacting bold monetary easing.
"If the rate of inflation exceeds the 2% target, the BOJ would naturally proceed with a policy to keep it within 2%," he told reporters.
At the same time, Abe noted that the government "must keep a keen eye on trends in prices and long-term interest rates." The prime minister stressed the need to improve the country's finances, indicating a stance of limiting monetary policy side effects with an eye on government bond prices.
He said the government would proceed with fiscal measures and growth strategies that would enable companies to increase hiring and wages.
To head off rising energy prices stemming from a yen weakened by monetary easing, Abe vowed to work "to lower import costs by diversifying resources." He is seeking exports of cheap U.S. shale gas to Japan, which he asked President Barack Obama to approve at their recent meeting, as a way to lower procurement costs.
(The Nikkei, March 12 morning edition)