Finance Minister Taro Aso said Tuesday the government will monitor what the effects of the Bank of Japan’s negative interest rate policy on financial institutions.
The Financial Services Agency “needs to carefully monitor financial institutions,” said Aso, who also doubles as state minister for financial services.
Bank shares fell sharply after the central bank announced additional monetary easing last Friday, saying it will apply a negative interest rate to some accounts held by financial institutions at the BOJ.
Meanwhile, new economics minister Nobuteru Ishihara said the decision showed the BOJ’s “serious resolve” in working to achieve its 2 percent inflation target, adding that he would monitor the impact of the new policy on financial institutions for the time being.
Aso said the BOJ had given the rate issue full consideration by applying different interest rates to current accounts, so that the move would not put excessive pressure on the management of financial institutions.