Bank of Japan board member Makoto Sakurai said on Thursday excessive monetary easing could destabilize the economy and suggested the bank could whittle down its massive stimulus program if growth continues to strengthen.
Sakurai, a former academic who is seen as representing the BOJ's mainstream views, also said the central bank must be mindful of the risk that prolonged easing may hurt financial institutions' profits and disrupt Japan's banking system.
"If financial institutions' profits are eroded for a long period time under a low-interest rate environment, that could affect financial intermediation," Sakurai said in a speech to business leaders in Maebashi, Gunma Prefecture, on Thursday.