Ex-BOJ Iwata:BOJ must cut key rate to -1.05% to beat deflation

[TOKYO] The Bank of Japan must lower a key interest rate further into negative territory, to about minus 1.0 per cent, for the country to conquer deflation, a former deputy governor at the central bank said on Thursday. "For Japan to achieve its mission of completely escaping deflation, the BOJ has to consider further expansionary policy,"Kazumasa Iwata, now president of the Japan Center for Economic Research, told reporters.

The BOJ in January decided to begin charging 0.1 per cent interest on some bank reserves parked with the institution, in a bid to kick-start the economy and pull it out of two decades of deflation.

REUTERS