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TOKYO :Bank of Japan Governor Kazuo Ueda said the central bank could end its negative interest rate policy if it believes it will achieve its 2 per cent inflation target, the Yomiuri newspaper reported on Saturday, signalling possible interest rate hikes.
The central bank could have enough data by year-end to determine whether it can end negative rates, Ueda told the paper in an interview on Wednesday.
“There are various means and options we can take if economic growth and inflation overshoot expectations,” Ueda was quoted as saying.
“If we judge that Japan can achieve its inflation target even after ending negative rates, we’ll do so,” he added.
The BOJ currently guides short-term interest rates at -0.1 per cent under its negative rate policy. It also caps the 10-year government bond yield around zero as part of efforts to reflate the economy and sustainably achieve its target.
Under a negative rate policy, banks and other financial institutions are required to pay interest for parking excess cash – beyond what authorities say they must keep on hand for safety reasons – with the central bank.
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