Former Japan Finance Ministry official Nakaso [seen as possible Kuroda replacement]: BOJ modified its stimulus measures to ease the transition away from an unconventional monetary policy; Thinking the current framework must be modified sooner or later
- One of the reasons behind the latest action may be to avoid burdening whoever succeeds Kuroda with the negative shocks stemming from adjustment
- BOJ has not succeeded so much in raising inflation expectations and bringing down real interest rates while side-effects became larger
- Prolonged monetary easing has amplified side effects such as blunting market functions, excessive yen weakening and looser fiscal discipline, at the expense of increases in real income