BOJ’s ex-official: BOJ stimulus should focus on wages not bonds

According to a former BOJ official, Tsutomu Watanabe, the Japanese central bank should stop its record bond purchases because the policy has failed to spur consumer prices and instead focus with the government on a wage target, Bloomberg reports.

Key Quotes:

“The lesson of the mistakes of the past three years is that just increasing the volume of money won’t break the norm of prices” 

“Due to the massive purchases of JGBs, I feel that the fiscal discipline of the authorities is loosening” 

“Eventually, you can’t rule out that this is going to invite a financial crisis”

“The unprecedented stimulus did have an effect in terms of weakening the yen and boosting share prices” 

“It affected financial markets, but the impact didn’t spread from banks to the real economy”