BoJ board member Makoto Sakurai said the central bank “shouldn’t recklessly seek to achieve our price target with additional easing”. Instead, the best monetary policy approach was to “patiently maintain” the current stimulus program. He acknowledged that “achievement of our price target is being delayed”. But that’s because “the relationship between monetary policy and price moves are changing and becoming more complex.”
Sakurai also said BoJ should be very mindful of the negative effects of the ultra-loose monetary policy. He added, “while financial institutions’ capital-to-asset ratios are sufficient from a regulatory standpoint, what’s important to note is that they are declining as a trend.” Hence, “the BoJ must make appropriate policy decisions by scrutinizing the merits and demerits, including the risk our policy is building up financial imbalances.”
