BOJ may hit bond purchase limit in 2017 – Ex-BOJ deputy governor Iwata

Former BOJ deputy governor Kazumasa Iwata said in a Bloomberg interview published on Wednesday, that the central bank will reach its bond buying limit by mid next year, which will make negative interest rates policy a key tool for the BOJ.

Key Quotes:

As for how low is appropriate, minus 0.7 percent, or if you want to have some room, it would be around a negative 1 percent

That’s what I personally think that the BOJ will "ultimately" shift the rate to negative 1 percent, without indicating whether this would be done in one or several steps

The BOJ just introduced a negative interest rate in January, so this is the time to gauge how its impact will spread

There is a limit to expanding bond purchases, so I expect they will cut the current minus 0.1 percent rate sometime in the future