Overnight

Hard times can produce hard comments and that's what at least one member of the Bank of Japan offered today, according the WSJ.

TOKYO—A Bank of Japan board member on Thursday issued stern warnings about Japan’s negative rate policy, underscoring tension within the central bank over Gov. Haruhiko Kuroda’s escalating monetary experiment to end deflation.

In comments that briefly kicked the yen higher, Takehiro Sato, one of the BOJ’s nine policy-setting board members, said negative rates aren’t producing their intended effects and could do the economy more harm than good, in a direct challenge to Mr. Kuroda’s positive messages.

The measure is also “contradictory” with the bank’s massive asset purchase program—its main policy instrument—so “their combination lacks sustainability,” Mr. Sato said in a northern Japanese town of Kushiro.

A former Morgan Stanley economist, Mr. Sato is a well-known critic of Mr. Kuroda’s “what-ever-it-takes” approach and is generally seen as having limited influence over policy. Mr. Sato opposed both an asset purchase increase in late 2014 and the launch of negative rates in January this year. He believes that the BOJ should go more slowly in trying to achieve its 2% inflation target partly because price growth which wasn't backed by wage increases wouldn’t be sustainable.

But Mr. Sato’s latest remarks were so critical that traders took note of them and drove up the yen on speculation that there would be no additional easing measures soon.

In the meantime, more investors and others seem to be questioning the effectiveness of Abernonics as his decision to delay a sales tax hike for two and a half years brings open criticism. The rally in the yen hurt the Nikkei as is faded more than 2% overnight after more weak economic data from surveys on global manufacturing.  The dollar fell to two-week low against the yen.

In other markets, the Shanghai Composite  was off 0.2%, the Hang Seng flat, the ASX 200 up 0.02% and  the Korean Kospi flat. Gold was up $2.40 trading at 1,217.22.