(Bloomberg) -- Former Bank of Japan Governor Masaaki Shirakawa voiced skepticism that the bank’s interest rate hike last week — the first in 17 years — should be regarded as a historic turn.

“The bank’s decision has excited considerable interest from the media and economists. Some journalists have even called it a ‘historic turning point,’” Shirakawa wrote in an opinion piece for Nikkei Asia published Thursday. “For me, this feels exaggerated, but the truth will only become clear when we can look back in retrospect, say in 5 or 10 years.”

Shirakawa is the first former BOJ chief to publicly and widely share his views after the central bank put an end to its massive easing program on March 19. The BOJ embarked on the most aggressive monetary easing program in its history under his successor Haruhiko Kuroda in 2013, after Shirakawa was criticized for doing too little, too late. 

One key reason for Shirakawa’s doubts, he said, was that the ultra-easy policy didn’t prove all that effective in the first place, so the discontinuation of it isn’t likely to have a material impact on the economy.

Japan’s inflation began to rise above the BOJ’s price target only in recent years after the supply shocks triggered by Covid-19 and Russia’s war in Ukraine. The policy rate is now set in the area of between zero and 0.1%, far below policy rates set by the BOJ’s major global counterparts.

At the same time, proponents of the BOJ’s easing campaign say monetary stimulus supported the economy via ultra easy financial conditions and corrected an excessively strong yen that had escalated deflationary pressures after the Global Financial Crisis in late 2000s.

Shirakawa singled out the BOJ’s apparent cautiousness, with its dovish forward guidance, as an interesting point. Even as it hiked rates, the BOJ said in its policy statement it expects accommodative financial conditions to be maintained for the time being. 

“It is indeed curious why the BOJ adopted such dovish forward guidance about future monetary policy because its inflation projections do not appear consistent with interest rates remaining at an ultra-low level,” Shirakawa said. The bank forecast a key inflation gauge would rise 2.4% in the fiscal year starting in April.    

To explain the dovishness, the former governor said he doesn’t rule out the possibility that the BOJ isn’t yet confident about achieving its 2% goal over the longer term, as he cited Japan’s declining demographics. Another possible reason is that the bank finds it difficult to raise rates due to the potential impacts on the government’s finances as it shoulders a high level of public debt. 

Shirakawa, currently a professor at Aoyama Gakuin University, has talked about the importance of boosting Japan’s productivity and making structural reforms to strengthen the nation’s growth potential. Still, he cited one positive aspect of the large-scale easing undertaken after he left the bank in March 2013.  

“One positive effect of the BOJ’s bold monetary policy experiment over the past 11 years is that many people have belatedly come to realize that monetary easing is not a solution for the problems facing Japan,” Shirakawa wrote. “If Japanese society really starts to tackle the country’s structural problems, 2024 might indeed come to be remembered as an historic turning point.” 

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