In the News
End of an Era - Japan Moves away from Negative Interest Rates

19th March 2024
A historic moment: for the first time since 2007, Japan has raised monetary policy interest rates and they're no longer negative. Rates have gone from -0.1% to between 0.0 and 0.1% in response to a rise in inflation.
However, you have to wonder about the efficacy of a 0.2% rise in interest rates to 0.1% as a means of countering inflation. I suspect that it's the symbolism that's important, with the Bank of Japan saying that it's prepared to raise rates further, if need be.

Bank of Japan ends eight-year era of negative interest rates https://t.co/4aE4mhaUzg
— Financial Times (@FT) March 19, 2024
WATCH: The Bank of Japan ended eight years of negative interest rates and other remnants of its unorthodox policy, making a historic shift away from a focus of reflating growth with decades of massive monetary stimulus https://t.co/cIJSyXw6AM pic.twitter.com/xHodLZOtKH
— Reuters Business (@ReutersBiz) March 19, 2024
This Bloomberg clip looks at Japan exiting negative interest rates, and the implications of this for the Japanese economy. It provides an excellent overview of how the end of the Japanese economic miracle led to decades of deflation, and decades of quantitative easing and negative interest rates.
However, what does the decision to adopt positive interest rates have for the wider Japanese economy. It's an excellent piece of economic history and gives and insight into why deflation is so problematic, and difficult to overcome.
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