TOKYO -- Bank of Japan Gov. Haruhiko Kuroda is following European Central Bank President Mario Draghi by introducing a negative interest rate on current accounts held at the central bank by financial institutions. The aim is to make the yen less attractive to investors and to help Japan weather global financial uncertainty.
Market volatility since the start of the year prompted these additional steps from the BOJ. Plunging crude oil prices -- they briefly fell below $30 a barrel -- forced the bank to revise its price outlook. The bank also had to push back further the time frame for achieving its 2% inflation target from the second half of fiscal 2016. The falling crude prices could act as a damper on Japan's upcoming spring wage negotiations, which BOJ executives consider key to achieving the inflation target.
