A Bank of Japan policymaker said Wednesday it appears to be becoming more difficult for the central bank to implement its large-scale monetary easing, citing the limited effects of additional easing steps introduced last October.
"The market's outlook on economic activity and prices has actually been revised downward, and therefore there is a lack of persuasive evidence of a further rise in inflation expectations," Takehiro Sato said in a speech to business leaders in Kofu, Yamanashi Prefecture.
Though the Bank of Japan's monetary easing is intended to put downward pressure on nominal interest rates across the entire yield curve through massive government bond purchases, such an effect has been "diminishing gradually" due mainly to reduced demand from investors to purchase bonds amid already low interest rates, he said.