Japan¡¯s central bank and the private sector must prepare for positive interest rates and a normalization of monetary policy, an influential business leader said on Thursday, acknowledging that it could take a year to achieve.

Takeshi Niinami, chairman of business lobby Keizai Doyukai and who also heads Suntory Holdings, said the Bank of Japan ¡°must normalize¡± monetary policy to help weed out incompetent firms and facilitate labor turnover toward growth industries.

The BOJ remains a dovish outlier amid a global wave of aggressive central bank policy tightening. Last month, it stuck to its negative interest rate policy targeting short-term interest rates at minus 0.1%.

It also kept the 10-year government bond yield target around 0% under its yield curve control (YCC) policy, but redefined 1.0% as a loose ¡°upper bound¡± rather than a rigid cap.

¡°The BOJ must make a move,¡± Niinami, who also serves as a private-sector member of a top government economic advisory panel, said in an interview. ¡°We must live in a world that contains (positive) interest rates.¡±

Many private-sector economists speculate that the BOJ may phase out crisis-mode stimulus if regular wage talks due early next year result in workers¡¯ pay rising more than prices.

¡°There must be quite a lot of political reservation about completely abandoning (current monetary policy settings),¡± he said. ¡°That¡¯s why the BOJ may be thinking it would be better off falling behind the curve.

¡°That should be taken as a message that the BOJ is leaving the YCC behind gradually,¡± Niinami said.

Niinami, who is also a former chairman of convenience store chain Lawson, said in January that he expected the BOJ to lay out a clear policy roadmap, including criteria for ending its practice of controlling long- and short-term yields.