BOJ’s Suzuki: Keeping rates very low could have unusual effects, side-effects on economy
|The Bank of Japan (BOJ) board member Suzuki is out on the wires now, via Reuters, making a scheduled speech, with the key headlines found below.
Keeping rates very low could have unusual effects, side-effects on economy.
Changes in economy, credit cycle could increase credit costs for financial institutions.
financial institutions' profits, business health are getting more vulnerable to domestic, overseas market developments.
When interest rates are too low, they narrow financial institutions' margin and lead to decrease in bank lending.
If lending rates fall further, financial institutions could start charging fee on deposits which could cool consumption, economy.
The BOJ policymaker’s warning over the negative effect of lowering rates further seems to have strengthened the bid tone around the Yen while renewed concerns between US and China also adds to the JPY buying, pushing USD/JPY further below the 106 handle.
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