Before going into more detail about this possibility, however, I want to discuss a specific institutional factor that currently constrains - somewhat artificially, I would argue - the ability of the Bank of Japan to pursue more aggressive policies, including both so-called non-conventional and more-orthodox policies.
This institutional constraint, often cited by BOJ officials, is the condition of the BOJ's balance sheet, and the fear, in particular, that a successful program of reflation might inflict capital losses on the BOJ and thereby weaken its institutional position. Like other central banks, the Bank of Japan has a balance sheet, with assets, liabilities, and capital.