Bank of Japan Gov. Yasuo Matsushita defended the bank’s prolonged easy monetary policy Wednesday as he responded to commonly asked questions and criticisms over its low interest rates.

Addressing businesspeople at a gathering in a Tokyo hotel, Matsushita denied that the easy money policy has unfairly benefited companies over households. He devoted nearly half of his 50-minute speech to justifying the low interest rate policy, saying it has helped firms increase profits and strengthen their financial structure.

He added that the timing thus far has not been appropriate for raising the rate. The central bank has kept its official discount rate, which commercial banks are charged when they take out BOJ loans, at an all-time low of 0.5 percent since September 1995.

Matsushita responded to arguments that the low rate has sacrificed households by decreasing interest returns on deposits and other personal assets by saying that the low rates have generally benefited households by having a positive impact on business activities, expanding employment and raising wages.

He stressed that the policy is not designed to increase financial institutions’ earnings, saying that the benefits to banks are only temporary. The benefits come partly from the time lag in interest rate effects on deposits and loans, and can turn into losses for banks when the rate is raised, he explained.

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