By Leika Kihara
TOKYO (Reuters) – Bank of Japan Deputy Governor Masayoshi Amamiya said the central bank will not rule out deepening negative interest rates as part of efforts to cushion the economic blow from the coronavirus pandemic.
But he said the BOJ must be vigilant to the cost of any such steps, warning that excessively low rates could hurt financial institutions’ profits and discourage them from lending.
“When considering additional easing steps, we must be mindful than ever before of their potential side-effects,” Amamiya told a news conference on Wednesday.
“Having said that, we have various options available including deeper negative rates,” he added. “We won’t rule out the chance of taking rates deeper into minus territory.”
Despite years of heavy money printing, central banks in Japan, the United