Former chief economist at the BOJ Hideo Hayakawa said in an interview yesterday:

  • PM Abe has tied the Bank of Japan’s hands with a delay in a sales-tax increase that’s hurt confidence in Japan’s finances
  • Damaged trust in Abe’s pledge to cut the deficit will make it “extremely difficult” for the BOJ to exit record stimulus without risking a bond yield surge
  • More easing would also be tough because Governor Haruhiko Kuroda effectively has made fiscal improvement a premise for further monetary stimulus
  • The BOJ’s expansion of asset purchase plans on Oct. 31 was “totally incomprehensible,” and could only be seen as a move aimed at paving the way for Abe to give the final go-ahead to a tax increase

More at Bloomberg

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Hayakawa left the BOJ 20 months ago