C.  Advantages of inflation targeting policy  In order to achieve stable and moderate inflation, what kind of policy will be desirable? One answer is a policy framework called inflation targeting. The Bank has been pursuing monetary easing under the price stability target of 2 percent in terms of the year-on-year rate of change in the CPI.
That can be understood as a typical example of inflation targeting policy (Chart 5). Enhancing policy credibility and predictability Inflation targeting policy has a number of advantages. To begin with, as the policy contains a specific numerical target for the future inflation rate, it can be judged objectively whether the target has been met.