[TOKYO] Bank of Japan board member Sayuri Shirai said she expects consumer inflation to reach around two per cent by the end of March 2017, the Nikkei business daily reported on Thursday.
Her view contrasts with the line of BOJ Governor Haruhiko Kuroda stating inflation should hit his two per cent target by around September next year as improvements in the economy prompt companies to raise wages and prices. "I personally have a slightly more cautious view and I expect inflation will rise to around two per cent at the end of fiscal 2016," Ms Shirai said in an opinion piece for the Nikkei.
Ms Shirai said a major reason inflation was far below the BOJ's target is because falls in oil prices had reduced energy costs, while the anticipated inflation rate reached in fiscal 2013 has been moving sideways instead of rising.
Ms Shirai, a former IMF economist who is more pessimistic about price prospects than some others on the board, also said that it households needed to see consistent wage rises before they would tolerate rising prices, which would in turn see inflation reaching the target.
Unless risks such as severe economic slowdown in China or Greek debt default crystallised, the output gap would improve via stronger domestic and foreign demand, she wrote. The output gap is the difference between the economy's potential and its actual output.