The Bank of Japan has done everything it can to normalize policy under Gov. Haruhiko Kuroda’s watch and is now set to ride out the rest of his term without any major changes, according to a former senior central bank official.
"The BOJ has reached the end of the line on normalization for now,” said Hideo Hayakawa, referring to a series of tweaks to the central bank’s stimulus framework in March that enabled it to cut back its asset buying.
"Unless the current leadership suddenly says it’s gotten policy wrong all this time, it’s pretty much done all it can,” the former executive director said in an interview, adding that the pandemic has underlined the importance of fiscal policy in helping the economy rather than a monetary approach.
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