The Bank of Japan has for years bought Japanese stocks as part of its huge massive monetary easing program to lift the country out of deflation and hit a 2 percent price-stability target.

Under governor Haruhiko Kuroda's quantitative and qualitative monetary easing (QQE) plan, stock-buying through exchange-traded funds started in 2013 at a pace of about 1 trillion yen annually, expanding to about 3 trillion yen in October 2014, and further to about 6 trillion yen in July 2016.

The purpose was to increase aggregate demand and thus inflation, as well as to encourage Japanese savers to take on more risk by buying equities.

But QQE has not yet delivered the hoped-for results, with inflation (excluding food and energy) stubbornly stuck around 0% despite the BOJ's huge efforts.

Meanwhile, stock purchases have helped raise equity prices but they have made the central bank a very large investor, raising problems of stock valuation and corporate governance. It is time to think again -- and consider phasing out the stock purchases.

There are very few central banks in the world that have purchased domestic stocks on this scale and for such a long time (for more than five years under QQE but for nearly eight years since its original introduction in late 2010) as part of the conduct of monetary policy.

The current ETF purchases are also different from when the BOJ previously purchased bank stocks to protect financial stability -- 2 trillion yen in 2002-2004 (in a domestic banking crisis) and 400 billion yen in 2009-2010 (during and after the global financial crisis).