ISM Associates: BoJ's Kuroda has not ruled out taking interest rates further into negative territory
: Japan's central bank, the Bank of Japan, has refused to rule out taking interest rates further into negative territory despite the policy's failure to boost inflation or economic growth.
During an interview given to a local newspaper, the Bank's Governor, Haruhiko Kuroda said that there is "definitely room for a further cut" alluding to the negative interest rate policy he introduced in February to general market surprise.
The policy was intended to weaken the Japanese yen but had the opposite effect resulting in a strengthening of the currency that wiped out much of the currency's decline against the US dollar. The Bank has introduced a controversial quantitative easing program that ambitiously sought to increase broad money supply by 80 trillion yen a year but it has met with limited success.
James Preston, Chief Economist at ISM Associates said, "The Bank of Japan, to put it bluntly, simply doesn't know what else to do. It has thrown everything at the Japanese economy and the currency but the results have been less than stellar."
My Kuroda has publicly ruled out the possibility of launching so-called "helicopter Money" whereby monetary policy fund fiscal spending but many investors believe that he will have little choice but to consider adopting the controversial policy if the yen slips much below 100 to the US dollar and growth continues to slow.
ISM Associates says it has pared exposure to Japanese stocks but standsready to add more weight if the central bank looks to be moving closer to moreunconventional monetary policy.
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ISM Associates: BoJ Could Go Further Into Negative Rates
Short StoryISM Associates: BoJ's Kuroda has not ruled out taking interest rates further into negative territory ISM Associates: Japan's central bank, the Bank of Japan, has refused to rule out taking interest rates further into negative territory despite the p...
