Bank of Japan board member Takehiro Sato Thursday repeated his warning about side-effects of the bank’s negative interest rate policy, saying the new easing tool may have dampened the already wobbly consumer sentiment.
In a speech to business leaders in Kushiro City Sato said, that the negative interest rate policy has the effects of monetary tightening, rather than an effect of easing. In addition, the negative interest rate policy could affect financial system stability. Sato also repeated his view that the BOJ should guide zero inflation to its target of stable 2% gradually.
Sato said he hopes the BOJ will conduct monetary policy flexibly under the flexible price stability target while obtaining better understanding by the market. He is one of the four board members who in January voted against the governor’s proposal to adopt a
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