Japan's incoming Prime Minister Shinzo Abe and his Liberal Democratic Party have reached an agreement with coalition partner New Komeito Party on an economic policy package that includes setting an inflation target of 2 percent.
The package reportedly calls for more stimulus to help the economy recover from its current slump. Abe and ally Natsuo Yamaguchi of New Komeito announced the accord in Tokyo yesterday.
The Bank of Japan currently maintains an inflation target of 1 percent. The Policy Board of the central bank has agreed to discuss price stability in its January monetary policy meeting.
This month, BoJ enhanced its monetary easing by expanding the asset purchase program by about JPY 10 trillion amid intense pressure from the country's new leadership to do more to stabilize the economy and tackle deflation.
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