How much difference would a 2% inflation target make?

The LDP’s manifesto for the elections in December, published today, includes a commitment to persuade the Bank of Japan to raise its inflation target from 1% to 2%. This has added to the downward pressure on the yen in anticipation of more aggressive easing from the central bank. We are not as concerned as some about the threat that this change might pose to the Bank’s independence, but remain unconvinced that tweaking the inflation target would make much difference in practice.