S&P warns of blow to Japan regional banks if negative rates deepen

Haruhiko Kuroda, governor of the Bank of Japan (BOJ) has signalled that deepening negative rates will be among key options if the BOJ were to ease.

TOKYO: Japanese regional banks will see core operating profits fall by 21% if the central bank deepens negative interest rates, S&P Global Ratings said on Tuesday, warning of the potential dangers of ramping up an already massive stimulus programme.

A 0.1% point cut in the BOJ's short-term policy target will also reduce core operating profits of major commercial banks by 6%, the rating agency said in a report.