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The Bank of Japan (BOJ) needs to be stopped by law from ever backtracking from its two percent inflation target, the architect of Abenomics told CNBC on Wednesday.
"As long as (current governor Haruhiko) Kuroda is the governor of the BOJ - that's okay, but we're afraid of the BOJ's old type of monetary policy will come back again," ruling Liberal Democratic Party lawmaker Kozo Yamamoto, a close adviser to Prime Minister Shinzo Abe who has been dubbed the "architect of Abenomics" told CNBC.
"So, we'll like to change the role and institutionalize the inflation target policy," by amending the Bank of Japan law, he added.
Yamamoto has been championing to enshrine the BOJ's inflation targets since last month, when the the central bank lowered its consumer inflation forecast for the fiscal year ending March 2016 to 1.0 percent, half the 2 percent target it set when it launched its massive monetary stimulus program nearly two years ago.
Japan's been struggling to reflate its economy, but a hike in consumption tax last April hampered those efforts.
While government data on Monday showed the economy emerging from recession in the fourth quarter after two quarters of negative growth, Yamamoto believes more needs to be done especially in the steadfast push for QE and its benefits to spurring inflation.
"So I'm proposing to change the Bank of Japan role, particularly right after Mr. Kuroda's term," he said, adding that "the first thing is to have the economic recovery; to get the appropriate normal GDP growth.
Yamamoto's views represent the critics of the "old" Bank of Japan, who see the central bank as one of the culprits who failed to put an end to the cycle of falling prices, wages, profits, and spending, as well as the stronger yen,that plagued Japan in the 1990s and 2000s.
But, Yamamoto may be a lone voice in his push to institutionalize the BOJ's inflation targets.
According to Totan Research's chief economist Kato Isuzu, one of Tokyo's most vocal critics of the BOJ's QE program, the "debate needs to evolve beyond demonizing deflation and blaming it for all of Japan's economic stagnation."
"It wasn't just monetary issues that caused the two so-called lost decades from the 1990s," Isuzu said. "There were other factors, such as historically high oil prices sucking wealth out of the Japanese economy, as well as an aging population."
Isuzu adds that with the nationwide local elections coming up in April, the "government won't be in a hurry to back Yamamoto's plans," Isuzu said.
The two shots of quantitative easing have sharply weakened the yen and "pushed up food prices (which are not included in the BOJ's core inflation criteria) - and the last thing voters want to hear is that prices will be rising even more," he said.
Food prices rose by an annualized 3.1 percent in December, according to government data.