By Leika Kihara and Takahiko Wada

TOKYO, Oct 12 (Reuters)Japan must swiftly revise laws to allow the central bank to issue a digital currency, a move that could provide a chance to reform the Bank of Japan’s existing mandates and enshrine its inflation target, a senior ruling party official said on Monday.

Kozo Yamamoto, head of the Liberal Democratic Party’s (LDP) council on financial affairs, said the BOJ risked being overtaken by private players who could launch their own digital currencies that could undermine the yen.

“If something too convenient pops up from the private sector, people might start to doubt whether they need yen as a currency unit. We must prevent this from happening,” he said. “This is fundamentally about protecting Japan’s currency sovereignty.

Yamamoto said he would prod the government and relevant agencies to speed up efforts to draft a revised BOJ law and other necessary legislation for issuing central bank digital currencies (CBDC).

However, more broadly, Yamamoto has been a vocal advocate of making changes to the BOJ law, which sets out the central bank’s mandates.

Revising the law to include digital currencies would also present a good opportunity to make other changes such as adding an inflation target and job creation to the mandates, much like the U.S. Federal Reserve, he added.

“The new law should also clarify that 2% inflation is the BOJ’s policy target,” he told Reuters.

The BOJ does currently set 2% as its inflation target, introduced in 2013. But the target is not stipulated under the BOJ law, which says only that its role is to ensure Japan’s price moves and financial system are stable.

Central banks globally have been reviewing their strategic goals, with the European Central Bank widely expected to follow in the footsteps

(Bloomberg) —


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Spain is stepping up its efforts to enter the race to build a hydrogen industry, putting it on par with France and Germany in seeking a greener fuel for heavy industry.

The government in Madrid has a roadmap to build 4 gigawatts of green hydrogen capacity by 2030 and is expected to announce Cabinet approval of the program on Tuesday, according to Sara Aagesen, the secretary of state of energy. The program would require an investment of 8.9 billion euros ($10.5 billion) within the next decade. 

“Things are getting very competitive,” Aagesen said in an interview on Monday. “Spain has the capacity to become a relevant player in the renewable hydrogen sector by taking advantage of our high potential of generating renewable power at very competitive prices.” 

The European Union has put hydrogen at the heart of its measures to cut greenhouse gas emissions by at least 55% in 2030 and to become climate neutral by 2050. Hydrogen, if it’s made with renewables, could replace oil, natural gas and coal and help eliminate about a third of emissions from industries like steel and cement by mid-century, according to BloombergNEF. The processes to make green hydrogen aren’t yet economically viable without government support. 

Spain’s plan includes 60 measures that will help establish a hydrogen supply chain, according to a government document seen by Bloomberg. The roadmap targets manufacturing plants with a capacity to make 300 to 600 megawatts of hydrogen from renewables by 2024 and 4 gigawatts by 2030. That would represent 10% of the EU’s target, which is for 40 gigawatts by 2030. Spain plans to start measuring hydrogen production by energy source and to review targets at least every three years. 

graphical user interface: Hydrogen Dreams

© Bloomberg
Hydrogen Dreams

The government has not yet established how much of the

Oct 5 (Reuters)Chicago Federal Reserve Bank President Charles Evans on Monday said he expects U.S. inflation to reach 2% by 2023 and signaled his support for allowing it to rise to 2.5%, a level seen by others at the Fed as excessive.

“The Fed “needs to have an ‘in it to win it’ attitude toward our inflation objective,” Evans said in remarks prepared for delivery to the National Association for Business Economics. “This will require actual overshooting, and we can’t be timid about doing so.”

In August the Fed adopted a new framework to counter long-running structural forces pulling down on inflation, officially aiming for 2% inflation on average.

Last month it put that framework into practice with a promise to keep rates at their current near-zero level until inflation reaches 2% and is on track to overshoot that level for some time. Most U.S. central bankers, including Evans, believe that won’t be until after 2023.

Important questions remain, including whether the Fed will increase asset purchases at some point to speed inflation’s return to 2%. Also unclear is whether or how long beyond 2023 the Fed will keep rates at zero, and how high above 2% will it allow inflation to go.

Evans for his part was clear: though the Fed may start raising rates before inflation reaches the 2% average inflation goal, it ought to keep policy loose enough to allow a strong overshoot.

Letting inflation rise only to 2.25%, as for instance Dallas Fed President Robert Kaplan suggested last week, would keep the Fed from reaching its average inflation goal until 2026, Evans said.

Allow inflation to reach 2.5%, he said, and the Fed could reach the 2% average goal a year earlier.

Had the Fed’s new framework been in place after the last crisis,

FILE PHOTO: A man wearing a protective mask stands in front of the headquarters of Bank of Japan amid the coronavirus disease (COVID-19) outbreak in Tokyo, Japan, May 22, 2020.REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) – Some Bank of Japan board members called for a review of the central bank’s policy strategy as the economic shock caused by the coronavirus pandemic pushes inflation further away from its target, a summary of opinions from a September meeting showed.

Those views underline the increasingly tough position the BOJ finds itself in, as inflation had failed to gain momentum even before the coronavirus ravaged Japan’s economy.

A few of the board members said the central bank may need to find a new approach to fire up inflation toward its 2% target, given the pandemic’s sweeping impact on companies and households.

“As economic developments change rapidly, it’s becoming hard to foresee inflation reaching our target. It’s thus necessary to conduct again a comprehensive examination of our strategy for achieving the price goal,” one member said.

“We may need to debate the appropriate monetary policy path from the perspective of how to balance the need to contain the pandemic and keep the economy alive,” according to another opinion shown in the summary.

Some others said the BOJ must act “promptly” and in close cooperation with the government if the pandemic’s scars deepen, according to the summary released on Tuesday.

The BOJ kept policy steady in September and offered a slightly more upbeat view of the economy than in July, suggesting that no immediate expansion of stimulus was needed.

But BOJ Governor Haruhiko Kuroda has said the central bank would work closely with new Prime Minister Yoshihide Suga’s administration to shield the economy from the broadening fallout of the pandemic, including by loosening policy further.

The BOJ releases