TOKYO (JAPAN) – The head of a lobby group of Japanese banks urged the Bank of Japan to avoid deepening negative rates, which would put further pressure on profits. This comes after the central bank pledged to have a look at measures to make its monetary easing framework more effective.
“The monetary easing was effective in terms of Japan’s economic growth, but it also had significant impact on regional banks’ profits,” said Yasuyoshi Oya, the chairman of the Regional Banks Association of Japan.
“We would like the BOJ to avoid deepening negative rates,” he told an online news briefing.
The combined net interest income of 64 regional banks dropped about 6% in fiscal 2019 from fiscal 2015, when the BOJ introduced its negative rates, data compiled by the group shows.
In December, the central bank unveiled a plan to study more effective ways to reach its inflation target of 2% inflation, following U.S. and European peers as a renewed spike in virus infections threatened to derail a fragile recovery.