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BOJ having a re-think on its 2-yr time frame inflation target?

FXStreet (Bali) - Is the Bank of Japan about to communicate to financial markets a more flexible approach to its 2% inflation target? That's what an overnight article at the Wall Street Journal suggests, noting that the Central Bank may have no option but to widen the time horizon initially estimated to meet the 2% price goal given the slower-than-expect growth in prices.

Takashi Nakamichiboj at the WSJ, notes: "Officials are considering flagging to investors that, while the central bank is committed to bringing about 2% price growth, it is wrong to think that the bank means to achieve it precisely two years from the launch of its aggressive stimulus measures in April 2013, according to people familiar with the bank’s thinking."

WSJ adds: "Signaling greater flexibility in the interpretation of the bank’s time frame of “about two years” would likely prompt investors and economists to re-calibrate their views on what policy action the bank might take in the future. Suggesting that the BOJ faces less time pressure than generally believed by investors could help prevent undue speculation for early policy action that might otherwise build up should price data prove sluggish over the coming months."

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