BOJ urged to dial back stimulus before inflation hits

Tokyo

THE Bank of Japan (BOJ) should dial back its massive stimulus before inflation hits its 2 per cent target, a leading candidate to become the next governor said, raising questions about the efficacy of the BOJ's radical approach to snuff out deflation in the world's third-largest economy.

Former BOJ deputy governor Kazumasa Iwata criticised the central bank's price forecasts as too optimistic and warned that even hitting one per cent inflation could be challenging given a recent batch of weak price data.