Officially spurred inflation could turn around, bite Japan in 2015: economists

Tokyo

IF Bank of Japan (BOJ) governor Haruhiko Kuroda has a New Year wish, it would likely be for the central bank to get closer to its 2 per cent annual inflation target in 2015. But while that remains top priority for now, some officials within the bank are beginning to acknowledge the possibility of an inflationary overshoot.

This threat "cannot be ignored", said one source within the bank last week, as Mr Kuroda moves to implement what has been dubbed its QQE2 policy, or second round of aggressive "quantitative and qualitative easing", while keeping open the option of further monetary stimulus if needed.

Inflation risks in Japan are "on the upside", chief foreign exchange strategist Tohru Sasaki at JP Morgan Chase Bank in Tokyo told The Business Times recently. "I think there will be a relatively large a…