* BOJ faces open rift on policy board over inflation target
* Three members worry 2-year time frame unrealistic
* Shirai expresses concern about disinflation in Europe
By Stanley White
TOKYO, Jan 9 Bank of Japan board member Sayuri
Shirai said it may be desirable to take more than two years to
achieve the central bank's inflation target if the burden on
households and the corporate sector proves to be excessive,
according to the text of a speech released on Thursday.
Shirai also said there is a lot of uncertainty about the
time frame for the BOJ's 2 percent inflation target and that the
central bank has yet to anchor inflation expectations around 2
percent, according to the text.
A rift has already emerged among the BOJ board as Shirai and
two other members objected to the central bank's timeframe for
its inflation target, reinforcing concerns that it is
unrealistic and could complicate monetary policy in the future.
"There could be instances where it may be appropriate to
conduct monetary easing aimed at achieving 2 percent at a pace
slower than about two years -- provided that the pace of
inflation is judged to be creating an excessive burden on
households and firms," Shirai said in the speech text.
If downside risks to the economy and prices emerge, the BOJ
should not hesitate to ease policy further, she said, according
to the text of a speech delivered on Tuesday in Singapore.
The BOJ aims to achieve its 2 percent price stability target
at the earliest possible time, with a time horizon of about two
years as a benchmark, to end 15 years of mild deflation.
Doubts about the price target have lingered since the BOJ
introduced it about a year ago with a greatly expanded its
monetary easing with huge purchases of government debt.
These doubts came to the fore in October when Shirai, a
former International Monetary Fund economist, and two other
policymakers on the nine-person board dissented against the
central bank's rosy outlook for achieving its 2 percent
Turning to overseas economies, Shirai said disinflation is
somewhat of a concern in the euro zone, but it is less of a
concern in the United States, according to the speech text.
Economists have expressed concern that European countries
could fall into deflation after the zone's economic malaise lead
to an unexpected slowdown in inflation.