No plan now to cut rates further into negative: Bank of Japan chief

Bank of Japan Governor Haruhiko Kuroda.
Bank of Japan Governor Haruhiko Kuroda. PHOTO: REUTERS

TOKYO (BLOOMBERG) - Bank of Japan Governor Haruhiko Kuroda said on Friday (March 4) he is not considering lowering the central bank's benchmark interest rates deeper into negative territory at this time.

Mr Kuroda, speaking to lawmakers in Tokyo, also said he would use the "three dimensions" of qualitative and quantitative easing and negative rates as necessary to ensure that the BOJ's 2 per cent inflation target is met soon.

He reiterated that the BOJ is always monitoring risks, and won't hesitate to take action as needed. He also said Japan's banks have ample capital and extremely good profits.

The BOJ has faced a backlash against the Jan 29 decision to charge commercial banks on a share of the cash they park at the central bank. The reaction to the policy has cast a cloud over the BOJ's next policy meeting, scheduled for March 14-15.

BOJ Deputy Governor Hiroshi Nakaso signaled in remarks ON Thursday that the central bank is prepared to reduce rates further, though not immediately. Mr Nakaso also said that financial markets need time to digest the unprecedented negative-rate policy, which took effect Feb 16.