Name: Bank of Japan adopts negative interest rate policy
Uploaded: 2016-10-18T14:07:54.000Z
Duration: 2 min 32 s
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The Bank of Japan stunned markets worldwide with its surprise announcement of a negative

interest rate. It is the first rate adjustment since October 2010... that puts that country's

Adverbs of degree

key benchmark at minus point-one percent. According to Kim Min-ji the rate can go even

Japan's central bank has decided to adopt a negative interest rate policy.

In a tight 5 to 4 majority vote,... the Bank of Japan said it will introduce an interest

rate of minus zero-point-one percent... starting February 16th... but will impose it only on

current accounts that financial institutions hold with it -- meaning lenders will be charged

to keep money with the central bank. The move, which was pioneered by the European

central bank, is seen as a means to push down borrowing costs,... in hopes that people would

spend more, save less and stimulate inflation.

"In terms of interest rates, the Bank of Japan has decided to implement a negative rate of

minus 0-point-1 percent. Going forward, if it becomes necessary, we would look at making

In addition, the BOJ will maintain its quantitative and qualitative easing program, expanding

its monetary base at the rate of 80 trillion yen,... or roughly 660 billion U.S. dollars,...

a year through buying up Japanese government bonds and other assets.

Japan has long suffered from deflationary pressures,... pushing the central bank to

take aggressive stimulus measures in recent years.

The central bank said while the Japanese economy was showing modest recovery,... there are

lingering concerns regarding plunging oil prices,... as well as uncertainties in emerging

markets, especially China. However, some experts say the move will have

"The decision was unexpected but it's not that aggressive. Firstly, the minus interest

rate does not apply to all assets and funds,... and despite lowering their inflation forecast,...

it's revised up its growth outlook -- so overall, the move is expected to have limited impact

Asian shares responded positively to the news,... with Japan's benchmark Nikkei shooting up

2-point-8 percent. The Shanghai Composite rose 2-point-9 percent,...

while Korea's benchmark KOSPI rose 0-point-3 percent.