The Bank of Japan may start discussions on ending its ultraloose monetary policy in the second half of fiscal 2015, when its inflation goal is expected to be achieved, a Policy Board member said Wednesday.
"I believe there is a high possibility that we can begin (discussions) in the second half of fiscal 2015 when the 2 percent (inflation) goal is expected to be achieved," Ryuzo Miyao said at a meeting of business leaders in Nagasaki Prefecture.
Miyao, one of the Policy Board members who voted for the BOJ's Oct. 31 decision to expand its aggressive easing, said the additional monetary stimulus increases the likelihood of meeting the inflation goal in the period starting next October, and that it will allow the bank to start considering exiting from the policy.
The BOJ will study how it can slow the pace of purchasing financial assets from banks as well as how to return to a more conventional policy of affecting short-term interest rates, Miyao said of the potential exit debate, in reference to a similar recent move by the U.S. Federal Reserve.
Miyao defended the BOJ's additional easing, over which the Policy Board was split, with four of the nine members voting against the decision endorsed by BOJ Gov. Haruhiko Kuroda and his two deputies.
"It was a decision made with (the bank's) further enhanced resolve to enable an early exit from deflation and sustainable growth along with price stability," Miyao said.
With Prime Minister Shinzo Abe widely seen as leaning toward shelving the plan to raise the consumption tax in October 2015, Miyao's remarks were apparently aimed at urging the administration not to waver in its commitment to improve Japan's fiscal health, the worst among major developed countries.
"I again strongly hope that stable progress will be made" with such efforts, he said.