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About Half Of Japanese Businesses Want The BOJ To Change Its Stance On Negative Interest Rates

24 February, According to a monthly survey by Reuters, nearly half of Japanese businesses believe that the central bank’s negative interest rate policy should be revised under new leadership, and more than a quarter believe that the price goal should be adjusted.

When Governor Haruhiko Kuroda’s ten-year term comes to an end, the government named scholar Kazuo Ueda to lead the Bank of Japan. When Ueda addresses the legislature on Friday and Monday, all eyes will be on him in an effort to learn how he plans to end the BOJ’s historic monetary stimulus without upsetting the financial markets.

Nearly 500 significant corporations were surveyed, and 47% agreed the BOJ should change its policy to prevent negative interest rates. The next most frequent opinion, with 28% of respondents, was that the central bank should alter its 2% inflation target.

A manager of an information services company who spoke on the record under the condition of anonymity said, “A abrupt change in monetary policy might be highly devastating to both firms and individuals, therefore it would be wise to aim for a gentle landing.”

Only 9% of respondents thought the BOJ should abandon its yield curve control (YCC) policy, a trading band for bond maturities that speculators have been criticizing more and more. Yet, 62% of businesses claimed that a normalization of monetary policy would not have a positive or negative influence on their operations.

Those who were asked to evaluate Kuroda’s legacy at the central bank gave him generally average to favorable ratings. 46% of respondents, the largest cohort, placed Kuroda in the middle quintile of 41–60 points on a scale of 0–100.

40% of managers gave Kuroda a rating in the top two quintiles, compared to 14% who did not.

The Kuroda BOJ has advantages and disadvantages, according to a management in the electronics sector. That undoubtedly helped the economy, but it also prompted the government to greatly expand its budget.
Business managers’ outlook on the near-term environment remained negative, with 80% predicting “not too good” to “poor” conditions over the next three months, a substantially unchanged percentage from the previous survey.
493 large non-financial Japanese companies were surveyed for the Reuters Corporate Survey between February 8 and February 17, including 246 manufacturers and 247 non-manufacturers. Respondents were surveyed under the condition of anonymity so they could express themselves more freely.

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