Former Bank of Japan board member Takahide Kiuchi has expressed the view that the negative interest rate policy had almost no effect. He said that when it was introduced, the two percent inflation target had not been met and policy was at an impasse, so it was launched as a desperate revival measure, but he opposed it due to inconsistency with the government bond purchase program and the deterioration of bank earnings. In reality, he pointed out, lending rates fell only slightly and the loan growth rate remained almost unchanged, while bank earnings came under severe pressure, and it may have led to a weaker yen and higher prices. He also said the strategy aimed at surprising the market was a major failure and became a trigger for a shift in the BOJ's communication policy.
Former BOJ board member says negative rates had almost no effect, implying BOJ policy may have weakened yen less than thought, but also suggests policy impasse; overall ambiguous for USD/JPY.