TOKYO, Nov 29 - An incoming member of the Bank of Japan Policy Board said on Monday it may abandon its ultra-loose monetary policy for interest rate targeting in the first half of the next fiscal year from April as the economy recovers./br/ Atsushi Mizuno, 45, chief strategist at Credit Suisse First Boston Securities in Tokyo, also told in an interview that he would welcome a return to traditional policy as the central bank's current "quantitative easing" had faults./br/ "Market mechanisms are being undermined," he said./br/ Under quantitative easing, the BOJ pegs interest rates at zero and floods the banking system with more money than needed in an attempt to boost economic activity and reverse a five-year decline in consumer prices./br/ The BOJ has vowed to maintain its easing framework -- in place now for almost four years -- until increases in the key consumer price index stabilise above zero percent year-on-year./br/ Hyper-loose credit means fewer incentives for businesses to restructure and cut debt, he said./br/ "If one is to say structural reform is necessary, then it's better to adopt interest rate mechanisms to some extent," he said./br/ Asked when the BOJ could change its policy, he said: "It could be possible in the first half of fiscal 2005." /br/ He also noted that the policy was initially introduced in March 2001 as an emergency measure as Japan appeared to be on the brink of a financial crisis and a deflationary spiral./br/ "Now it's in its fourth year, and that in itself could undermine trust," he said./br/ Mizuno said it was unlikely for the BOJ to raise its current account deposits target, or the benchmark for its easing policy, much higher./br/ He also said he opposed