Bloomberg headline – no further details.
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There has been a great deal of expectation in the market that the BOJ will ease further, some saying they will do so before the sales tax hike due in April, some saying they will do as some time after. The expectations has been an important factor in not seeing the yen strengthen a great deal after its 105 lows earlier this year (though we have seen 100.80 odd since).
While Kuichi does not speak for the entire BOJ board (he is often the lone dissenter), this is strong comment from him.
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ADDED – OK, here’s more detail:
- An additional dose of monetary easing to head off a potential downturn triggered by April’s sales tax hike would do more harm than good, Bank of Japan policy board member Takahide Kiuchi told The Nikkei in an interview.
- Of the bank’s nine board members, Kiuchi is among those most concerned about the downside risks and is a known pessimist on the country’s economic outlook
- “the side effects of additional measures would outweigh their merits,” Kiuchi argued
- And one additional round of supplementary easing, he cautions, may cause the market to clamor for more. “It’s difficult to tell how effective additional easing would be in lifting prices,” Kiuchi said.
- Monetary policy “is meant to create an environment in which the Japanese economy can achieve its full potential,” Kiuchi said, warning against a heavy reliance on monetary policy as an economic tool.
