Japan bond prices near all-time high Japanese bond prices moved to within a whisker of their all-time highs on Tuesday as new central bank governor Haruhiko Kuroda vowed to broaden the scale and scope of asset purchases to banish deflation in the world's third-largest economy. Speaking in parliament, Mr Kuroda said he would consider scrapping the so-called "banknote rule," under which the Bank of Japan's regular purchases of Japanese government bonds are kept below the amount of cash in circulation. He will also consider abandoning the restriction limiting the BoJ's asset-purchasing programme to bonds with up to three years to maturity, meaning that the bank's balance sheet will stay bigger for longer. "The 2 per cent price target is to be achieved as soon as possible," Mr Kuroda told lawmakers, referring to the inflation goal imposed on the BoJ in January by Shinzo Abe's new government. Achieving it in two years is something that I have in my mind, and I will take responsibility to achieve that obligation. The governor's comments contrast sharply with those of his predecessor, Masaaki Shirakawa, who used his final press conference last week to argue that monetary stimulus alone will not be enough to drag Japan out of the deflation that has weighed on sentiment for much of the past 15 years. Analysts note that Mr Kuroda is using very similar language to Mario Draghi, president of the European Central Bank, who said last July that he would do "whatever it takes" to prevent a break-up of the currency union. "[Mr Kuroda] is facing the same fundamental factors as Mr Shirakawa, but with a different sense of urgency" said Tetsuya Inoue, chief researcher at the Nomura Research Institute and a former BoJ official. He realises that the most important thing is to change deeply-rooted expectations of deflation. Inflation data on Friday this week is expected to underline the scale of that challenge. Economists predict the nationwide consumer price index (excluding fresh food) to have slipped by 0.4 per cent in February from a year earlier, according to Bloomberg, accelerating from a 0.2 per cent decline in January. Over the same period, Japan's monetary base expanded by about 15 per cent, as Mr Shirakawa made a series of tweaks to the size and the scope of the BoJ's asset-purchasing fund, which is due to reach Y76tn ($807bn) by the end of this year. The yen weakened by about 0.6 per cent against the US dollar within two hours of Mr Kuroda's comments on Tuesday, bringing its losses since mid-November - when it became clear that Mr Abe would become the new prime minister - to 16 per cent. Meanwhile, the 10-year government bond touched a yield of 0.53 per cent, within 10 basis points of its record low of June 2003. The BoJ's first policy meeting under its new leadership is scheduled for April 3 and 4.