Japan Updates Economic Plan to Add Stable-Inflation Language While Keeping Existing Monetary-Policy References

Japan’s government released an updated draft of its annual economic and fiscal agenda on July 8 that adds language directing monetary policy toward stable price increases. The new phrasing calls for appropriate monetary policy that contributes to stable inflation.

An earlier version of the plan stated that the appropriate conduct of monetary policy was very important without any reference to inflation.

The prior draft said it was very important for monetary policy to be guided appropriately to achieve a stronger economy. The revised draft keeps two references stating that appropriate monetary policy remains very important. It now emphasizes conducting such policy to achieve stable inflation.

Market fears that the government is infringing on central bank independence have pushed Japanese bond yields to multi-decade highs, Reuters reported.