BANK of Japan (BOJ) hopes that cutting interest rates below zero will boost spending and investment, but fear, inertia and years of paltry returns mean the nation’s army of savers is unlikely to march to the central bank’s tune.

    After BOJ made its move Friday to charge banks for holding their reserves from Feb. 16, some retail banks are already cutting their deposit rates, and the rest are expected to follow suit.

    Bank of Yokohama Ltd., one of Japan’s biggest regional lenders, cut its one-year rate to 0.02 percent from 0.025 percent, and Resona Bank, a unit of fourth-largest lender Resona Holdings, halved its rate to 0.025 percent on five-year deposits.

    Bank of Japan Governor Haruhiko Kuroda aims to break the deflationary mindset that has blighted Japan for decades and get the economy moving, but his compatriots are compulsive savers. More than half of the US$14 trillion in Japanese households’ financial assets are either bank deposits or cash, compared with only 13.7 percent for the United States and 34.4 percent for the eurozone.

    Ryoji Yoshizawa, director at Standard & Poor’s Ratings Japan, doesn’t think the cuts will change that.

    “Interest rates are already very low, so further cuts are not likely to have much impact on depositors.”

    Tokyo pensioner Kozo Nishimura remembers getting 8 percent on his savings at Kyowa Bank, which later became Resona, 320 times what the bank pays now on five-year deposits, but he has long since become used to getting scornfully low returns.

    “A change of 0.01 points is such a microscopic thing,” said Nishimura, 70, who used to own an electronics shop. “For now, I’ll just wait and see.” (SD-Agencies)