Mubasher: The Bank of Japan decided on Friday to introduce a negative interest rate policy, a move aimed at boosting an economic recovery and warding off deflation.

Tokyo's central bank imposed a 0.1% fee on selected current account deposits, hoping that commercial banks will be encouraged to make more loans and so stimulate economic growth.

“The BOJ will cut the interest rate further into negative territory if judged as necessary,” the bank said in a statement announcing the decision.

BOJ governor Haruhiko Kuroda said the world’s third-biggest economy is recovering moderately and the underlying price trend is rising steadily, “but there’s a risk recent further falls in oil prices, uncertainty over emerging economies, including China, and global market instability could hurt business confidence and delay the eradication of people’s deflationary mindset.”