Bank of Japan board member Shirai casts doubt on 2% inflation target

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Investing.com - Bank of Japan board member Sayuri Shirai on Wednesday repeated that she thinks the central bank needs to pay closer attention to downside risks to growth and inflation because aims to reach 2% annual inflation by 2015 may not be reached.

"These inflation expectations are still well below the 2% target and there is uncertainty as to whether these expectations will rise to the level of 2% during the projection period (in 2015), Shirai said in prepared remarks.

Japan's government is working with the central bank to beat deflation in the next two years by pumping up fiscal spending to match aggressive asset purchases by the Bank of Japan in an effort launched in April of this year that has sparked a weaker yen and lifted earnings for many export-oriented companies.

The Bank of Japan has said the economy is moderately recovering, but board member Shirai said that wage gains needed to bring inflation higher may not materialize and that consumption faces headwinds as does the global economy.

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