Kaori Kaneko, Tetsushi Kajimoto

TOKYO (Reuters – Japanese policymakers reaffirmed Tuesday’s Bank of Japan (BOJ), its commitment to its 2% inflation rate in a meeting that was held between the Bank of Japan chief, the nation’s economic and finance ministers.

In accordance with the 2013 joint statements, the Japanese government and central bank agreed to maintain close contacts and cooperate. This was in keeping with the commitments made.

There was speculation in the markets that BOJ and government might review their joint statement. The BOJ also may reconsider the goal of 2% inflation, as stubbornly low prices make it difficult to achieve.

Reporters were told by Economy Minister Daishiro Yamagiwa that the most crucial issue was to confirm the joint declaration.

The BOJ and government must maintain close contacts. BOJ’s goal is to attain 2% price stability while continuing with the economic growth strategy.”

BOJ Governor Haruhikokuroda and Finance Minister Shunichi Suzuki met to discuss the economic and financial situation. The meeting lasted just over an hour. However, Suzuki stated that the yen wasn’t on the agenda.

Recent weeks have seen the Japanese currency fall to around 114yen. It had touched a four-year low of 114.695 Oct. 20, which was almost four years ago.

The Tuesday meeting will take place after Fumio Kirishia, Japan’s Prime Minister, took office last month. His party won the general election on Sunday.

The meeting was the first of its type since Jan 2013, when the central bank and government issued a joint declaration stating the BOJ’s policy objective to achieve 2% inflation.

In a joint declaration, January 2013, the government was also urged to continue efforts to restore public finances to order.

These goals have not been achieved nearly nine years later. Massive money printing failed to stimulate inflation, while stagnant growth, the COVID-19 pandemic, and stagnant economic activity have caused the government to open its fiscal doors.

Core consumer inflation remains close to zero. The central bank has estimated that Kuroda’s fiscal 2023 term will see the inflation target of 2% not being met.

It is still not possible for the government to achieve a primary surplus (excluding new bonds sales) or debt servicing.