BOJ's Kiuchi Warns of Risks From Easing; Policy Board Member Skeptical That Central Bank Will Hit Inflation Target
OTSU, Japan--One of the Bank of Japan's more outspoken policy board members warned on Wednesday that too much monetary stimulus could cause problems for the economy in the future, even as the head of the bank said that it should stand ready to act again if needed.</br></br>Board member Takahide Kiuchi, a former Nomura Securities economist, has been skeptical over the BOJ's ability to attain its 2% inflation target in two years and is wary of maintaining an ultra-easing monetary policy for an extended period.</br></br>"If the current large-scale easing policy were to be protracted or strengthened by additional measures, the associated side effects would instead outweigh the positive effects," he said at a meeting with business leaders in the city of Otsu in Shiga Prefecture, western Japan.</br></br>Financial markets and many private-sector economists say, however, that the central bank will add more fuel to its massive easing program later this year to shore up the economy.</br></br>Speaking in Tokyo, BOJ Gov. Haruhiko Kuroda took a different tack, saying that the central bank stood ready to take additional action if necessary to achieve the 2% inflation target.