The Bank of Japan is caught in a trap and has lost policy credibility, economist Mohamed El-Erian said Thursday.
"The shocker is whatever they do, they get it wrong. They ended up doing too much last time, and they suffered a currency appreciation, and they did nothing this time, and they got the same outcome," El-Erian told CNBC's "Fast Money: Halftime Report."
The Bank of Japan surprised markets on Thursday by leaving monetary policy unchanged. The Street had expected the central bank to cut interest rates and increase its purchases of ETFs.
Japanese policymakers adopted negative interest rates in January. The move was expected to halt currency appreciation in the world's third-largest economy, which would support domestic exporters and encourage wage growth. But the dollar has fallen nearly 10 percent against the yen this year.