BoJ's Yamaguchi: Bank Should Conduct a Genuine Review

Ibeth Rivero

Yamaguchi has also called for halting ETF purchases, which is apparently pushing up stock prices instead of aiding the bank to reach its inflation target. 

Former Bank of Japan Deputy Governor Hirohide Yamaguchi said that the Bank of Japan must conduct a genuine review of its monetary policy stance, given the rising cost of prolonged monetary easing.

“It’s unlikely the BOJ can come up with an outcome that has a substantial impact on the economy and markets,” Yamaguchi told a news outlet. “The review will probably be just a show of gesture that it’s doing ‘something’ to address the cost.”

Yamaguchi has also called for halting ETF purchases, which is apparently pushing up stock prices instead of aiding the bank to reach its inflation target. Yamaguchi explained that this is because it's impossible for the bank to guide public perception at its will, calling on the bank to conduct a "genuine" policy review and modify its policy framework.

The Bank of Japan's current monetary policy statement has been linked with the ongoing stock bubble. The Nikkei 225 recently broke through the 30,000 mark, which resembles a similar move in the 80s and which has pushed some analysts and policymakers to call on the bank to halt its asset purchases program.

The Bank of Japan is set to review its policy statement next month. The bank's governor already stated that the main goal behind this meeting is to ensure that an ultra-loose monetary policy stance can be maintained for a long period and to make policies more effective.

Bank of Japan Governor Haruhiko Kuroda said that the bank is seeking ways to make the ETF buying program more effective, adding that they'll examine how the employment of those tools is affecting the markets.

"The BOJ's various tools, including its ETF buying, will be the target of the March review," Kuroda commented. "We'll examine how our tools are affecting markets and look at what we can do better.”

By 10:02 GMT, the US dollar went up by 0.50% against the Japanese yen, hitting the 105.77 level.

Ibeth Rivero

Ibeth contributes daily market commentary in both English and Spanish (both of which she speaks fluently) and she also manages the DailyForex mobile app to ensure that traders around the world are getting important market updates in real time.

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