TOKYO Oct 5 Former Japanese Economy Minister
Heizo Takenaka said on Wednesday the Bank of Japan will lower
its minus 0.1 percent interest rate further to achieve its 2
percent inflation target.
Takenaka, professor emeritus of Keio University and a member
of a government panel on investment, told Reuters in an
interview that the BOJ's new policy framework is "orthodox" and
it was not necessarily a big change.
As for pushing the rate it sets on some excess deposits that
commercial banks park with the BOJ further into negative
territory, he said, "The BOJ will do so without doubt."
The prominent economist added, "The important issue is that
people need to acknowledge that the BOJ's policy has yielded
The negative rate, introduced in February, hurts banks
because they have avoided passing it along as a charge on
deposits. The BOJ last month changed policy, shifting its target
from the amount of money it pumps into the economy to trying to
control the bond yield curve to keep longer-term rates above
(Reporting by Kaori Kaneko, Yuji Aso and Izumi Nakagawa;
Editing by William Mallard and Simon Cameron-Moore)