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A Question Mark on Japan: Pimco CEO

Investors are correctly factoring in the Bank of Japan, PIMCO CEO Mohamed El-Erian said Thursday.

"I think the market is rightly questioning the effectiveness of the Bank of Japan — not the willingness, but the effectiveness — for a number of reasons," he said.

On CNBC's "Fast Money," El-Erian said that the BOJ had yet to announce structural reforms, noting that stimulus was a "bridge" only.

(Read More: What Yen's Swings Will Do to U.S. Markets)

"Second, Japan is trying to do a lot and can only do that through capturing demand from other countries," he added.

"And finally, the initial conditions are the worst possible," El-Erian said. "They have the lowest policy credibility. They had bad demographics. So what you're seeing is the market questioning the effectiveness of unconventional policies in Japan."

While a day earlier investors had been worried about central banks' commitment and mixed to weak economic data, El-Erian noted that the market was receiving "somewhat better data."

(Read More: Japan Bear Trade Is Back On: Dennis Gartman)

"The indications out of D.C. suggest that the Fed is trying to tell the markets, 'Hey, we're not going to tighten that quickly, but we still have a question mark about Japan and we still have a question mark about liquidity,'" he said.

Trader disclosure: On June 13, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long AGU; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami's wife, Linda Snow, works at Merck; Brian Kelly is long TLT; Brian Kelly is long Treasuries; Brian Kelly is long Australian dollar; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long JPM; Karen Finerman is long TGT; Karen Finerman is long GOOG; Karen Finerman is long M; Karen Finerman is long SPY; Karen Finerman is long MDY PUTS; Jon Najarian is long INTC; Jon Najarian is long WMT; Jon Najarian is long BBRY; Jon Najarian is long MSFT; Jon Najarian is long DIS; Jon Najarian is long DDD; Jon Najarian is long FNSR; Jon Najarian is long NTAP; Jon Najarian is long OC; Jon Najarian is long TMO; Jon Najarian is short GLD PUTS.

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