Years of heavy money printing by the Bank of Japan has made the bond market dysfunctional and fiscal policy heavily dependent on cheap money offered by the bank, a former BOJ deputy governor said, warning against expanding monetary stimulus further.
Toshiro Muto, who retains strong influence among policymakers, also said it would be hard for Japan to intervene in the currency market to stem yen gains unless the currency strengthens well below 100 to the dollar.
The yen stood around 104 to the dollar on Wednesday.
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