The nation's financial markets would have been in worse shape if the Bank of Japan had not adopted a negative interest rate, BOJ Gov. Haruhiko Kuroda said, rejecting suggestions the new policy has been counterproductive.
"I really don't think that the introduction of the negative interest rate backfired or caused the yen to appreciate and stock markets to decline in Japan," Kuroda said during a question and answer session at Columbia University in New York. "If anything, I can say that if we didn't introduce the QQE with the negative interest rate, financial markets in Japan would have been even worse."
The yen has rallied almost 11 percent since Jan. 29, when the BOJ announced it would charge financial institutions for a portion of the funds that they park at the central bank. The Topix share index has fallen 5 percent, while the banking index has plunged 15 percent. Although BOJ policy has been the subject of debate among investors, weaker global growth, changes to the outlook for U.S. interest rate hikes and uncertainties in China and emerging markets have all been influential.