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TOKYO May 26 Bank of Japan Deputy Governor
Kikuo Iwata said on Monday the central bank was ready to adjust
monetary policy if the economy overheats and accelerates
inflation well above the bank's 2 percent target for a sustained
"The BOJ's current policy intends to prevent not just
deflation but inflation from well exceeding 2 percent, such as
to 4 percent or 5 percent, for a medium- to long-term period,"
Iwata told a seminar.
"If the economy overheats and inflation exceeds 2 percent on
a permanent basis, we will adjust policy," he said. "On the
other hand, if our price goal is distant and prices don't seem
to be approaching the target, we will adjust policy the other
way" by expanding stimulus.
(Reporting by Leika Kihara and Stanley White; Editing by Chris