The Bank of Japan's unprecedented monetary easing will fail in its goal of spurring 2 percent inflation, according to Takahiro Mitani, president of the fund that manages the world's largest pool of pension savings.

While Japan is making progress toward ending deflation, consumer-price gains will probably stay between 0.1 percent and 1 percent, said Mitani, the head of the 124 trillion yen ($1.21 trillion) Government Pension Investment Fund (GPIF). The fund may revise asset allocations in as little as a year after a government-appointed panel recommended a review of domestic bond holdings, he said.

"A 1 percent inflation rate may be possible, but that's different to the Bank of Japan target," Mitani said in an interview at GPIF's Tokyo headquarters today. "We haven't seen real demand to pull prices up yet. Whether inflation will be stable is questionable."

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
  • Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.