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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

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

  • lower if necessary.

  • 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

  • that even lower if necessary."

  • 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

  • limited impact.

  • "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

  • on sentiment or the real economy."

  • 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.

  • Kim Min-ji, Arirang News.

The Bank of Japan stunned markets worldwide with its surprise announcement of a negative

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Bank of Japan adopts negative interest rate policy

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    楊鑫 posted on 2016/10/18
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