A newly appointed member of the Bank of Japan Policy Board said Friday the central bank should eventually stop its ultraeasy monetary policy, calling it "morphine" for the economy.
By that comment, Kiyohiko Nishimura meant that the BOJ's "quantitative easing" monetary policy could alleviate Japan's economic pains for the time being but not solve its problems. But he declined to say when the policy should end.
"Frankly, it is true that quantitative easing is morphine to the economy. But it is also true that the policy has helped the country overcome difficulties over the past four years and we should evaluate it correctly," the 52-year-old former University of Tokyo economics professor told his first news conference.
The BOJ adopted the monetary policy in March 2001. Under it, the central bank pumps ample liquidity into the money market to keep interest rates nearly at zero.
He termed morphine a "deadly poison" that the country needs to stop taking.
"But if we end it too quickly, it causes pain," he continued. "It is important that we end it gradually."
Earlier in the day, the government appointed Nishimura to replace Kazuo Ueda, a leading theorist, whose term expired Thursday.