Outgoing Bank of Japan Governor Expresses Regret Over Failure to Achieve 2% Inflation Target

Governor Kuroda Haruhiko's Final Press Conference on the 7th
Highlights 'Escaping Deflation' as Achievement of 10-Year Tenure

On the 7th, Haruhiko Kuroda, Governor of the Bank of Japan (BOJ), who is one day away from retirement, cited "escaping deflation" as an achievement during his 10-year tenure, while expressing regret over the failure to achieve the inflation target.

According to NHK and other sources, Governor Kuroda held his final press conference before retirement on the same day and made these remarks.

Haruhiko Kuroda, Governor of the Bank of Japan (BOJ)
[Photo by Reuters Yonhap News]

Appointed in March 2013, shortly after the launch of the second Shinzo Abe administration, he served as the longest-serving central bank governor in Japan's history for 10 years, continuously pursuing monetary easing and ultra-low interest rate policies. He was a key figure supporting former Prime Minister Abe's economic policy, "Abenomics." He set a 2% inflation target and implemented large-scale monetary easing policies to escape deflation following the collapse of the bubble economy.

Governor Kuroda achieved some success in escaping deflation through large-scale monetary easing; however, the prolonged monetary easing policy also drew market criticism for side effects such as dealing with high inflation rates of 3-4% and the BOJ's excessive holdings of government bonds.

Reflecting on the monetary easing policies he promoted over the past decade, Governor Kuroda self-assessed, "Deflation, where prices continuously fall, is no longer the case." He cited the significantly changed economic environment, including the current situation where wages are more likely to rise, as an achievement.

Regarding the market's critical evaluation of unconventional monetary policies such as large-scale monetary easing, Governor Kuroda rebutted, saying, "They were sufficiently effective."

However, he expressed regret that the "stable realization of the 2% inflation target, initially aimed to be achieved within two years, was not reached." He pointed to the deeply rooted deflationary mindset as the reason for failing to meet the inflation target.

About his post-retirement plans, he said, "At 78 years old, I have no intention of working full-time," adding, "If possible, I would like to teach students at a university."

Meanwhile, his successor, Governor Kazuo Ueda, will take office on the 9th. Governor Ueda has expressed his intention to continue monetary easing for the time being, but it is expected that he will gradually seek an exit strategy from large-scale monetary easing to address side effects such as high inflation and distortions in long-term interest rates.