The Bank of Japan's new negative interest rate policy may bring "side effects" if the central bank further pushes rates into the red, a former BOJ chief economist warns.
Hideo Hayakawa, who was an executive director at the BOJ before he retired in 2013, said on a NHK television discussion show Sunday that people will not see negative rates at the current minus 0.1 percent level. Even so, he said there were cases in Europe where negative rates have led to individuals being charged on their deposits.
The BOJ on Feb. 16 started charging 0.1 percent on a portion of the excess funds that financial institutions have in its accounts. When it introduced the policy at its January meeting, the BOJ said it would cut the rate further "if judged as necessary," prompting fears that individuals may face charges on money kept in bank deposit accounts.