By Tetsushi Kajimoto

TOKYO (Reuters) – Japanese Finance Minister Taro Aso called on Tuesday for a combination of monetary and fiscal policies to help boost inflation towards the Bank of Japan’s 2% inflation target, saying easy money policy has its limit.

Aso said that both fiscal and monetary policies are needed to control inflation.

Aso said this when Aso was asked about Haruhiko Kuroda’s efforts to reduce inflation. He became the longest-serving Japanese central bank governor on Tuesday.

Rarely does the finance minister speak in length about monetary policies, as he typically leaves that to the BOJ.

Aso stated, “It is true that the BOJ hasn’t yet reached its 2% inflation goal.” Without stronger consumer demand, we cannot expect inflation growth. Only monetary policy can limit inflation.

Kuroda’s aggressive monetary stimulus failed to bring inflation up to the desired 2% goal after 8 1/2 years of office.

The long-term easing caused concern over side effects, such as losses for banks and increased profits. Analysts consider this a high order.

The core inflation in Japan remained flat in August and fell barely in the following 13 months. This supports the belief that the inflation target won’t be met until Kuroda retires in 2023.

At the two-day rate review last Wednesday, the BOJ remained at its current short-term target of 0.1% and at around 0% for its 10-year bond yields.