business

BOJ cuts key rate to around zero

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Why not a negative interest rate? Pay companies to take out bank loans.

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Govt is confronting with its top trading partner China and BOJ is struggling to revive economy, two forces working opposite to each other?! No end in sight to peoples sufferings.

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The Japanese gets more screwed as their savings are like dead fish. Any American / European with a lower saving rate than a Japanese is better off on the long run.

No wonder I put all my money to Europe where my money brings at least 3% of interest.

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@kyoken as long as thats not an irish bank!

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kyoken, unless you live in Japan. If you live here, you'll eventually change your euros back into yen. With the yen and euro rate the way it is and with the transaction fees, you won't be making much money. That's why a lot of older Japanese people with lots of money invest in JGBs. Not much of a return, but at least your money is safe and you'll be making more than keeping it in a bank.

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Headline in today's Bloomberg report-- Wall Street Sees World Economy Decoupling From US

(Some people will surely feel vindicated if it turns out true-- albeit partially)

And for the struggling US manufacturing-base, this should be a welcome news =/

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During the recession, the Fed ended up buying a total of roughly $1.7 trillion of mortgage securities and debt, as well as government bonds.

We'll never really know the final nos of US toxic debts-- hopefully it mended a bit during the past 2 years :)

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Hasn't the rate been virtually zero since around 1997?

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"Why not a negative interest rate? Pay companies to take out bank loans."

Been there and done that.

Do you think that if BOJ gets to the point that it is handing out money, then it is time to think about something else a little more out of the box? I sure do.

USAexpat: YES. And for that reason, this move is almost meaningless. It gives more fuel for an engine that is not moving. It is pushing on a string.

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BOJ measures are good but not enough. Aggressive FX intervention is necessary. Macro measures like cutting govenment spending and subsidies together with capital gains, payroll, inheritance tax cuts combined with sales tax hike will be potent. Freeing up regional airports to foreign airlines, designated critical mass free industrial zones, aggressive talents targeted immigration, 50 million annual tourist target and freeing up rice market will help.

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