At this week’s policy review, the Bank of Japan is considering releasing an analysis of the potential impact of lowering its negative interest rate to show its determination to use this option if needed, according to people familiar with the matter.
BOJ officials say the assessment would hint at the likely results of a lower negative rate on commercial banks, and would serve as a basis for measures the central bank could take to alleviate the side effects of such a move, the people said.
The BOJ will release details of its review on Friday and is widely expected to tweak its stimulus framework while stopping short of a major overhaul. The bank is looking to shore up its stimulus for the longer term as the pandemic has made its price target an even more distant goal.
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