BOJ Suzuki: Must be vigilant to impact of easing on bank profits

WAKAYAMA, Japan (Reuters) – Bank of Japan board member Hitoshi Suzuki said on Thursday the central bank must be vigilant to the potential damage that prolonged monetary easing could have on financial institutions’ profits and the country’s banking system.

“We must carefully watch how the cumulative effect of continued monetary easing … could affect Japan’s financial system,” Suzuki, a former commercial banker, said in a speech to business leaders in Wakayama, western Japan.

Under a policy dubbed yield curve control (YCC), the BOJ pledges to guide short-term interest rates at minus 0.1 percent and the 10-year government bond yield around zero percent as part of efforts to achieve its 2 percent inflation target.

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