BoJ's Kuroda: Negative rate applied to very limited portion of commercial banks' deposits

The negative rate applied to a very limited portion of commercial banks' deposits at the Bank of Japan (BoJ), BoJ Governor Haruhiko Kuroda noted on Monday.

"Longer-term government bond yields, such as for 20-, 30- and 40-year bonds, have been moving in the positive range, helping pension funds, life insurers," Kuroda further added. "The government's commitment to seek fiscal sustainability in medium to long run is critical for maintaining investor confidence in government bonds."

Kuroda also said that he doesn't think that Japan needs negative income tax or basic income system as it has a fairly well-established medical insurance and pension system.

Market reaction

The USD/JPY pair showed no reaction to these comments and was last seen trading at 105.47, where it was down 0.12% on a daily basis.