The Bank of Japan added a negative interest rate policy on Jan 29 to its already substantial monetary easing policy, imposing a 0.1 percent fee on newly deposited funds. Thus, the nearly $2.5 trillion in excess reserves currently sitting at the BOJ can continue to sit there without penalty.

The ultimate goal of the negative rates policy in Japan is to guide inflation to the golden 2 percent mark by encouraging lending in the hopes of stimulating economic growth.

The BOJ governor, Haruhiko Kuroda, said the measure was intended to bolster business confidence and consumer spending.

But while the Japanese are spending, it is not in a way likely to reinvigorate the country's economy.

Following the Bank of Japan's decision to lower interest rates below zero, many Japanese consumers have reportedly rushed to hardware store in search of one thing: safes. Japanese households are squirreling away money at home instead of investing it or putting it into bank accounts.

In its statement, the BOJ focused on falling oil prices and the slowdown in China rather than any economic weakness at home.

It will soon be three years since Kuroda went ahead with a "new phase" of quantitative and qualitative monetary easing in keeping with "Abenomics", the Abe administration's policy of drastic monetary aimed at jump-starting the country's anemic economy.

But although Abenomics has raised stock prices and devalued the yen against the dollar, it has brought no significant changes to the nation's economic growth rate and consumer prices.

Japan's newspaper Asahi Shimbun says even if lending rates drop further, it is unlikely that Japan's businesses will suddenly start investing more amid sluggish domestic demand. Consumers are unlikely to start spending while their future remains uncertain.

The author is China Daily Tokyo bureau chief. caihong@chinadaily.com.cn