Bank of Japan Governor Haruhiko Kuroda says he sees no need to implement negative deposit rates in Japan as borrowing costs were already very low due to the central bank's aggressive asset purchases.
The European Central Bank has adopted negative deposit rates to penalize financial institutions for parking excess funds at the central bank and encourage them to boost lending instead.
Kuroda said such a step was unnecessary in Japan as the BOJ's massive asset-buying program, dubbed "quantitative and qualitative easing" (QQE), was pushing down bond yields across the curve.
Kuroda also warned of potential drawbacks from excessive financial regulation such as hampering banks' profit-making activity, as global policymakers push through drastic regulatory reforms.
The extent of effects of large-scale regulatory reforms, such as the Volcker rule in the United States, on the flow of funds among financial institutions remains unknown, Kuroda said.
Most economists polled recently say they expect the Bank of Japan to expand its stimulus program in the first half of next year, although a small minority of respondents forecast no further central bank easing throughout 2016.
