Skip to main content

How much difference would a 2% inflation target make?

The LDP’s manifesto for the elections in December, published today, includes a commitment to persuade the Bank of Japan to raise its inflation target from 1% to 2%. This has added to the downward pressure on the yen in anticipation of more aggressive easing from the central bank. We are not as concerned as some about the threat that this change might pose to the Bank’s independence, but remain unconvinced that tweaking the inflation target would make much difference in practice.

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services


Get access