Shinzo Abe, Japan’s prime-minister-in-waiting, has threatened to revise the law governing the Bank of Japan if it refuses to introduce a 2 per cent inflation target at its January policy meeting.

The comments by Mr Abe, whose Liberal Democratic party won a landslide victory in this month’s general election, highlight his determination to push the BoJ to adopt a more aggressive monetary policy in an effort to end chronic deflation and boost economic growth. It marks the most explicit challenge yet from Mr Abe to the independence the central bank has enjoyed since 1998 in setting monetary policy.

On Fuji TV yesterday, Mr Abe, who this week is set to become Japan’s seventh prime minister in just over six years, said a new approach was essential to defeating the deflation dogging the economy. – The Financial Times Limited 2012