Bank of Japan Deputy Governor Iwata: Link between money supply, prices is over long term

TOKYO Thu Mar 21, 2013 8:12am EDT

Kikuo Iwata attends a hearing session at the upper house of the parliament in Tokyo March 12, 2013. REUTERS/Yuya Shino

Kikuo Iwata attends a hearing session at the upper house of the parliament in Tokyo March 12, 2013.

Credit: Reuters/Yuya Shino

TOKYO (Reuters) - New Bank of Japan Deputy Governor Kikuo Iwata said on Thursday that the relationship between money supply and consumer prices is a long term phenomenon and not something that occurs over the short term.

Iwata, speaking at an inaugural press conference, also said inflation targeting is a tool used to foster employment and economic growth.

Hiroshi Nakaso, the central bank's other new deputy governor, also said that it is important for higher corporate earnings and higher wages to accompany inflation.

Iwata, an academic, and Nakaso, a career central banker, assumed their posts on Wednesday.

(Reporting by Stanley White; Editing by Shinichi Saoshiro)