BoJ is reluctant to launch aggressive quantitative easing

02/17/2010 | Financial Times (tiered subscription model)

As officials at the Bank of Japan prepare to meet, they are facing increasing pressure to ramp up quantitative easing, particularly purchases of government bonds. Policymakers are reluctant to do so because they fear bond buying will actually hinder the economy rather than help it. "The purchase of government bonds is just like injecting morphine into the dog," said Teizo Taya, a former member of the central bank's policy board. "All of a sudden the dog will jump and start running," he said, but the dog could overdose.

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