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Bank of Japan ends negative interest rate policy, opting for its first hike in 17 years

23 Comments
By Yuri Kageyama

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23 Comments
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Let's see what happen to people who have many loans in Japan.

https://www.wsj.com/finance/currencies/the-end-of-japans-negative-rates-will-be-a-slow-moving-tsunami-3dd41964

-8 ( +6 / -14 )

More of the same but in a slightly different shade. Grim outlook for the yen

-6 ( +10 / -16 )

One of the few good things about being poor is that news like this means nothing to me and has zero impact on my life!

-9 ( +22 / -31 )

I assumed this would boost the yen but instead it weakened, is it because people were expecting a bigger change?

7 ( +14 / -7 )

Plenty of JT contributors (not me) over the years claimed that the BOJ was trapped, unable to raise its rates or otherwise tighten. Oh, well. The BOJ will also to scale back its asset purchases including the ETFs. Let's see if that crashes the TSE, as so often predicted here (not by me).

9 ( +20 / -11 )

A bold move! I may be able to buy a happy meal now with the interest from my savings account.

-3 ( +10 / -13 )

A range of 0 to 0.1% is still about 4% less than most of the developed world. So almost nothing happened. Almost...

9 ( +17 / -8 )

Plenty of JT contributors (not me) over the years claimed that the BOJ was trapped, unable to raise its rates or otherwise tighten. Oh, well. The BOJ will also to scale back its asset purchases including the ETFs. Let's see if that crashes the TSE, as so often predicted here (not by me).

It's true that they were trapped, the effects will be negative whatever they would have chosen to do, basically they have just been running from their problems by keeping the negative interest rate, no one wanted to be the guy in power when it was time to tackle it.

7 ( +11 / -4 )

Problem is, Japan's inflation was actually in a downward trend and so it is odd that we are raising rates now before inflation would be considered "stable". A small rate hike will likely not impact as drastically as we think, but I do wonder if this will spiral us back to a deflationary state. Hopefully this hike sets us at 0.0% for now so that we can observe for a little bit.

Another factor supporting the shift: Japanese companies have announced relatively robust wage hikes for this year's round of negotiations with trade unions.

Wages and profits at companies were improving, the Bank of Japan said, in releasing its latest decision, referring to “anecdotal” accounts as well as data it had gathered lately.

I'll believe it when I see it.

6 ( +8 / -2 )

"Plenty of JT contributors (not me) over the years claimed that the BOJ was trapped, unable to raise its rates or otherwise tighten"

Patting yourself on the back when the Bank has moved from "Negative Rates" to "Zero Percent" rates is certainly, at the very least, premature!

6 ( +10 / -4 )

0.1% increase? That's nothing. It will have little to no impact on anything. Despite what panic merchants may say.

Nothing to see here. Carry on.

11 ( +19 / -8 )

no one wanted to be the guy in power when it was time to tackle it.

Right. And with Kishida san's approval ratings plummeting to zero, he is the ideal fall guy.

5 ( +7 / -2 )

US inflation picking, Super Core inflation, basically services, excluding rent, up 6.8% in Feb, running over 5% since Dec, accelerating, meanwhile commodities also repricing higher, thus US inflation expectations rising.

BOJ trying to protect Yen with today's policy shift. US money supply jumped historic approx. 50% in 2021, Biden Admin policy, setting off global inflation, rapid rise US rates and currency destruction in most countries, including Japan and terrible global inflation.

-6 ( +2 / -8 )

One of the few good things about being poor is that news like this means nothing to me and has zero impact on my life!

Why are you poor, man? By choice? You sound pretty intelligent, so should be no problem bringing in the dough.

2 ( +8 / -6 )

JeffLeeToday  04:59 pm JST

Plenty of JT contributors (not me) over the years claimed that the BOJ was trapped, unable to raise its rates or otherwise tighten. Oh, well. The BOJ will also to scale back its asset purchases including the ETFs. Let's see if that crashes the TSE, as so often predicted here (not by me).

We are talking about a 0.1 % increase with real rate increasing from -3.5 % to - 3.4%…

The neutral interest rate which would be neither contractionary nor expansionary is estimated to be 2%.

1 ( +2 / -1 )

David Brent -

One of the few good things about being poor is that news like this means nothing to me and has zero impact on my life!

"You'll own nothing and you'll be happy" - Ida Auken

5 ( +7 / -2 )

“Concerning risks to the outlook, there are extremely high uncertainties surrounding Japan's economic activity and prices,” the Bank of Japan said.

You can say that again.

3 ( +4 / -1 )

Amazing BoJ taking risk to ship it's short term rate from -0.1 / 0% range to 0 /0.1%.

It is so minuscule/ridicule that the yen is going further down ,meaning it is sill exceptionally accomodating in view of real inflation.

As I said before, hand sof BOJ are well handcuffed so they cannot make change. If they higher more, debt will inflate crazy.to be impossible to even start reimbursing.

1 ( +5 / -4 )

It all depends on what one borrows and what one owes!! Big risk large gains, small risk small gains. Large debt you will feel the pain, small debt less pain!

1 ( +1 / -0 )

Gold in yen is off to the races for 5 years now

0 ( +1 / -1 )

Um... I thought the boc operating in quarter of a % was being cautious...

0 ( +0 / -0 )

The neutral interest rate which would be neither contractionary nor expansionary is estimated to be 2%.

And does a central bank get there? By small incremental moves, so as not to cause shocks in the financial markets. It's a gradual path not a leap, unless there's a crisis, such as the jumbo hikes by the Fed during Pandemic. But in Japan, there has not been such a crisis. BOJ stuck to loose policy for so long -- because it could. Its counterparts - facing much higher inflation rates -- could not.

-2 ( +0 / -2 )

the BOJ would continue with those government bond purchases at a rate of about 6 trillion yen 

I assume that is a monthly rate… meaning they are going to buy 72 trillion yen of extra debt per year.

Insane.

Just stop financing the governments excessive spending already. Save the local currency.

-1 ( +0 / -1 )

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