The central bank last month unveiled a plan to pay 0.1% interest on deposits held by lenders that cut costs, boost profits or consolidate, as COVID-19 adds pain to regional banks suffering from years of ultra-low interest rates.
"The chance is very low" that a new system to strengthen regional finances would affect interest rate formation in the market as a whole, Amamiya told an online news conference held after a virtual meeting with business leaders in Akita, northern Japan.
(Reporting by Kentaro Sugiyama; Writing by Tetsushi Kajimoto; Editing by Chris Gallagher)
