Need more time to assess impact of negative rate policy on markets – BOJ’s Ishida

Bank of Japan (BOJ) board member Koji Ishida was once again on the wires over the last hour, noting the effects of negative interest rates on the Japanese financial system.

Key Quotes:

Dissented to adoption of negative rates because doing so now won't have much positive effect
Effect of negative rates on stimulating portfolio rebalancing, pushing down yield curve limited

Private borrowing costs are already very low so adopting negative rates likely won't help boost capex much

Even if negative rates prompts Japan investors to shift assets overseas, that won't stimulate Japan's economic activity

Japan's financial system is resilient, so don't think declines in bank stocks reflect jitters over financial system instability

Need more time to assess impact of negative rate policy on markets

Had some doubts of easing policy when markets were so unstable, though that wasn't key reason for dissenting last month

Maintaining current ultra-loose policy for too long could affect Japan's now resilient banking system

Given impact on banks, it's important to end deflation as soon as possible and normalise interest rates