Now that the European Central Bank has cut its deposit rate, while the Bank of Japan has held steady on policy for more than a year, concerns are growing that BOJ Gov. Haruhiko Kuroda has little room to maneuver.
The ECB lowered the rate it pays banks on their overnight reserves by 10 basis points on Thursday to minus 0.3 percent. It also boosted its quantitative easing plan to include regional debt and extended the policy until at least March 2017.
Meanwhile, the BOJ cannot cut its similar rate of 0.1 percent, because that may lead to an insufficient pool of the bonds it buys to expand the monetary base, said Mizuho Bank Ltd. and Totan Research Co. It may need to change its policy framework, they say.