These corporations have so much cash on hand (or in the bank or other financial assets) that, even when the do increase investment somewhat, they have no need to borrow more from the banks.
Followings are the key points fro this report,
- BOJ tried another surprise “bazooka” but only managed a pop gun
- Will apply a “negative interest rate” of 0.1% on new deposits of “excess reserves” held by banks at the BOJ
- Hope is that it will get banks to lend more and thereby boost company investment and consumer spending
- It won’t work: problem is not banks unwillingness to lend, but business/firm unwillingness to borrow