By Tetsushi Kajimoto


TOKYO (Reuters) - Few Japanese companies see the central bank's aggressive monetary stimulus as achieving its stated goal of spurring inflation, a Reuters poll found, with firms citing negative fallout from the program more than positive effects.


Desperate to stimulate growth, encourage capital investment and reverse price declines, the Bank of Japan has embraced negative interest rates, bought up massive amounts of bonds and snapped up riskier assets such as exchange-traded funds.


Asked in a monthly Reuters Corporate Survey to assess the impact of 3-1/2 years of super easy money policy by picking two effects from a series of options, only 6 percent of firms said the BOJ had paved a path toward defeating deflation or accelerating inflation - the very aim of its stimulus program.


The results of the poll, conducted Aug. 30-Sept. 12, come as the BOJ prepares for next week's monetary policy meeting, at which it will conduct a comprehensive review of its stimulus program after failing to reach its 2 percent inflation target.


Most analysts, however, expect the central bank to double down on its bold easing stance with a deepening of negative interest rates or an expansion of asset purchases mentioned as options it may pursue.

Among the negative effects cited in the poll, around 40 percent of respondents cited the detribalization of financial markets while a quarter said it causes lax fiscal discipline. Another 23 percent said it had increased and distorted reliance by companies, households and markets on government policy.

"Companies may appreciate the fact that the BOJ stimulus brought down interest rates and weakened the yen but that alone proved insufficient to boost the Japanese economy," said Hidenobu Tokuda, senior economist at Mizuho Research Institute, who reviewed the survey results.

Top positive responses were lower borrowing costs, cited by 36 percent, and a weaker yen, by 25 percent, which lifts exporters' earnings. Sixteen percent said it boosted the economy.

The survey, conducted for Reuters by Nikkei Research, was sent to 532 big and medium-sized firms. About 250 responded to questions on the impact of the BOJ's stimulus.

Asked to pick their top two choices for how they would use money saved due to lower borrowing costs wrought by the BOJ's negative rate policy, 36 percent picked capital expenditure, nine percent chose new business development and another nine percent picked M&A.

But a large proportion were not as focused on growth strategies with 42 percent saying they would keep money in the bank or as cash reserves while 17 percent said they would repay debt. Four percent opted for share buybacks.

"Many firms must be thinking that the introduction of negative rates has made it harder to foresee the future, discouraging them from investment," a manager at an electrical machinery maker said in the survey, which companies answered anonymously.

One of the chief benefits of the BOJ's policy for many exporters was a sharp weakening of the yen in the first two years after Prime Minister Shinzo Abe came to power.

But the yen has regained a lot, albeit not all, of the ground lost, advancing almost 20 percent since the start of this year - causing much concern.

Nearly two-thirds of companies said they would revise down their earnings forecasts for this financial year if the dollar falls and stays below 100 yen, versus the current level of around 102 yen.

"It's not just the exchange rate levels per se, the lack of stability in currency markets has affected long-term planning for corporate strategies," said a manager at a rubber manufacturer.

(Reporting by Tetsushi Kajimoto; Additional reporting by Izumi Nakagawa; Editing by Malcolm Foster and Edwina Gibbs)