The Bank of Japan plans to make its controversial negative interest rate policy the centerpiece of its future monetary easing program, promising to weigh further cuts as expansions to asset buying near their effective limit.
The central bank has pledged a comprehensive assessment of its monetary policy at a two-day meeting starting Tuesday. The BOJ is expected to compile a review concluding that the economic benefits of the minus 0.1% deposit rate announced in January outweigh the side effects. Gov. Haruhiko Kuroda and his deputy governors are unanimous on this point, and are expected to gain support from the majority of the other policy board members.
Some observers had predicted that the bank would use the review as a chance to scrap negative rates in light of objections from the financial sector over diminished profitability. The BOJ instead appears intent on sticking to the policy.