January 24, 2020 / 11:18 AM / a month ago

DAVOS-BOJ's Kuroda warns of side-effects from prolonged ultra-low rates

DAVOS, Switzerland, Jan 24 (Reuters) - Bank of Japan Governor Haruhiko Kuroda said on Friday a prolonged low-interest rate environment could have negative effects on the country’s banking system.

But he stressed the BOJ’s resolve to maintain its massive stimulus programme, and defended its ultra-easy policy as having helped eradicate deflation.

“Certainly, a low interest rate situation prevailing for so long a time, including negative interest rates, means that there might be some side-effects on the financial system,” Kuroda said.

“We have been carefully monitoring the financial sector and financial markets, So far we have not seen any kind of financial bubble or financial excess,” he said at a seminar at Davos. (Reporting by Balazs Koranyi; Writing by Leika Kihara in Tokyo; Editing by Alex Richardson)

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