The Bank of Japan board member, Goushi Kataoka, mentioned that the stimulus plan must be revised to reach the target rate at an earlier time which would also protect the banking system of the country from monetary easing, according to the report from Sankei newspaper on Tuesday. Kataoka has expressed his disagreement to maintain the monetary policy at a steady rate and it is too early to have an exit countermeasure from its massive stimulus program. He also mentioned that the central bank aims to reach the 2 percent inflation target but it questionable if this action is sufficient for this to happen. If the BOJ does not take necessary actions while the economy is in a good condition and takes to long to reach the 2 percent inflation, they could end up with lesser tools to face the next crisis. If there are bigger things that would happen in the future, this would impose risks and would hamper the growth towards the target. Prior to this, it is necessary to make sure the implementation of the precautionary measure. It is improbable to gain sufficient votes to affect the central bank’s decisions. His point of view emphasizes the problem of the BOJ amid higher price target with easing policies. Amid the policy framework for last year, the BOJ directs the short-term interest rates at minus 0.1 percent and zero percent of 10-year government bond yield. Kataoka has a different perspective with other members of the board who wanted to push back the policies instead of being more aggressive as Kataoka wanted. Kataoka opposes the September and October decision to maintain the policy at a steady rate. In October, he raised steps to lower the 15-year bond yields down to 0.2 percent. During the interview, lower 15-year yields would have a bigger effect in improving the economy amid high expectations for inflation and decline of borrowing costs for short-term. It will be much more difficult for Japan to reach the 2 percent target for fiscal 2019 in the current condition of the bank. Thus, they needed a more aggressive stance in their monetary policies. It is necessary to prevent the current monetary policy from continuing since the inflation rate did not meet the 2 percent and slowly affect the Japan’s financial system.
