Bank of Japan struggling to meet inflation target, analysts say

Half a year after Bank of Japan governor Haruhiko Kuroda unleashed record monetary easing, economists see the central bank failing to meet its inflation target, underscoring the case for stronger measures to revive the economy.

While the median estimate of BOJ board members released last week showed the bank expects consumer prices to rise 1.9 per cent in the 2015 fiscal year - in line with its goal of 2 per cent in two years laid out in April - just two of 34 analysts surveyed see the target met in that timeframe.

With the bank seen standing pat on the pace of asset purchases until it can assess the impact of a sales tax increase in April next year, the onus is now on the government to sustain confidence in the Abenomics project.

Prime Minister Shinzo Abe has yet to introduce legislation such as corporate tax cuts that companies have advocated to boost Japan's potential.

"Progress on the growth strategy has been slow," said Yuichi Kodama, the chief economist at Meiji Yasuda Life Insurance. "If the delays continue, foreign investors could lose confidence in Abenomics, and stocks could fall."

The benchmark Topix stock index - still the best performer among 24 developed markets this year in the aftermath of Kuroda's easing and a tumble in the yen that made exporters more competitive - trailed counterparts last month, signalling waning enthusiasm with Abenomics. The index rose less than 0.1 per cent.

Fifteen of the economists surveyed said the lack of bolder steps on the growth strategy was undermining the central bank's reflation campaign.