BOJ negative rate policy clouding households
17:19 JST, January 20, 2022
TOKYO (Jiji Press) — The Bank of Japan’s prolonged ultralow interest rate policy is beginning to affect households in the country.
Although gasoline and food prices continue to rise in Japan, the central bank plans to continue its massive monetary-relaxation measures as its 2% inflation target is still far from being attained.
“There’s no need at all to correct the current monetary easing,” BOJ Gov. Haruhiko Kuroda told a news conference on Tuesday, denying speculation of an early interest rate hike by the central bank.
According to the BOJ’s latest outlook, announced the same day, the country’s consumer prices are expected to grow only 1.1% in fiscal 2022 and the same rate in fiscal 2023.
“It’s too early to discuss an exit” from the easing policy, Kuroda said, indicating that the central bank will maintain the policy until it achieves the 2% inflation goal.
Meanwhile, a number of financial institutions are starting to collect commission fees from customers as the BOJ policy is weighing on their profitability.
The BOJ’s negative interest rate, a pillar of its monetary-easing scheme, is imposed on excess funds in financial institutions’ current account deposits at the central bank.
In December last year, MUFG Bank, one of the country’s three megabanks, joined Japan Post Bank, some trust banks and others facing the negative interest rate.
MUFG, as well as other major banks, had avoided the negative rate by actively managing funds. However, a rise in customer deposits due partly to the government’s coronavirus relief measures has forced the bank to hold excess funds.
With no exit in sight from the low interest environment, financial institutions are desperate to secure profits. Among them, moves to pass on costs to customers may grow further, such as introducing account maintenance fees and charging fees for the handling of coins.
"Business" POPULAR ARTICLE
-
Japan Lags in Efforts to Gain Value from Human Resources; Govt Working to Increase Usage
-
Japan, U.S., Philippines to Strengthen Nickel Supply Chains; Reduce Reliance on China for Critical Minerals
-
Ride-Sharing Services Start in Tokyo; Kanagawa, Aichi, Kyoto, Others To Follow Suit
-
Dollar Hits 33-Year High of 151.97 Yen in Tokyo (Update 1)
-
Bank of Japan Governor Lauded For Smooth Policy Change; Future Interest Rate Hikes to be Focus of Attention
JN ACCESS RANKING
- Japan Lags in Efforts to Gain Value from Human Resources; Govt Working to Increase Usage
- M6.0 Earthquake Hits Japan’s Tohoku Region; Fukushima, Iwate, Miyagi Prefectures Observe 4 on Japanese Scale With No Risk of Tsunami
- Cherry Blossoms Draw Crowd to Tokyo’s Ueno Park; Viewing Season Kicks Off to Slow Start
- Shohei Ohtani’s Former Interpreter Ippei Mizuhara Appears in School Textbook; Publisher Considers Replacing Content
- Shinkansen Services Suspended After Man ‘Searches for Phone’ on Tracks; Disruption Affects About 14,000 Passengers