Published by Mark Smith-HalvorsenAround 130 members of the incumbent Democratic Party of Japan have drawn up a draft bill which will raise inflation targets above two per cent and devalue the yen against the dollar.The plans, which would involve printing money to initiate a depreciation of the currency on international markets, have put the party at loggerheads with the Bank of Japan (BoJ).According to the Telegraph, the bank's governor Masaaki Shirakawa warned legislators that printing money to fund public spending would be illegal."History has proven that central banks directly buying government securities caused severe inflation and dealt a blow to the economy. The BoJ is now providing adequate funds," he said.The move comes as part of a broader strategy to target growth in the world's second largest economy. While Japan considers devaluation, the pressure is mounting on China to allow the yuan to appreciate in open-market foreign exchange trading.For more information on foreign exchange treasury services and risk management, visit our Corporate FX site