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."