Economic and fiscal policy minister Kaoru Yosano said Tuesday he understands the Bank of Japan's position of basing any policy shift on the consumer price index.
"Under the BOJ Law, the central bank is by definition aimed at achieving price stability," Yosano told a news conference. "It is natural for the BOJ to emphasize the CPI."
Yosano was answering a question about a BOJ working paper released Monday in which the central bank concluded that the CPI is a desirable tool for measuring price trends and steering monetary policy, while the gross domestic product deflator -- a compilation of price indexes used for gross domestic product -- tends to be widely revised and released too late.
The central bank says the content of the paper, penned by BOJ officials, does not necessarily represent its official position.
Fearing that the economy might return to deflation, the government and the ruling coalition have been urging the BOJ not to rush to lift its ultraloose monetary policy based on recent slight rises in the core CPI, excluding perishables, from the previous year's levels.
Instead, the government and ruling bloc insist the BOJ also refer to the GDP deflator, which has been in the negative column for 31 straight quarters compared with year-earlier levels.
Yosano also said monetary policy is the BOJ's jurisdiction, so the government should respect the central bank's position as much as possible.
At the same time, he added the government and the BOJ should work together so the economy can further improve.
The BOJ has vowed to stick to the quantitative easing policy until consumer prices post solid growth on a year-on-year basis. Most analysts anticipate the central bank will scrap the ultraloose policy around April.