DJ: Iwata Says BOJ Can Reach 2% Inflation Target With JGB Buying Alone

TOKYO--Kikuo Iwata, one of the Japanese government's nominees for Bank of Japan deputy governor, said Tuesday the central bank can reach its 2% inflation target only by buying long-term government debt.

"Based on my study, I have a sense we can bring about 2% inflation within two years through purchases of long-term government bonds," said Mr. Iwata, a 70-year-old university professor and a longtime critic of the BOJ, at a confirmation hearing to a committee of the upper house of parliament. "I think we can do that without stepping into the purchase of risky assets."

Mr. Iwata also said the central bank needs to continue "bold monetary easing for the time being" to help Japan's economy grow at a pace closer to its potential growth rate--a state he said is needed to prevent the emergence of an output gap.