TOKYO: The Bank of Japan (BOJ) ended eight years of negative interest rates and other remnants of its unorthodox policy on Tuesday (Mar 19), making a historic shift away from its focus on reflating growth with decades of massive monetary stimulus.
The Japanese national flag waves at the Bank of Japan building in Tokyo, Japan, Mar 18, 2024. TOKYO: The Bank of Japan ended eight years of negative interest rates and other remnants of its unorthodox policy on Tuesday , making a historic shift away from its focus on reflating growth with decades of massive monetary stimulus.
"If trend inflation heightens a bit more, that may lead to an increase in short-term rates," Ueda said, without elaborating on the likely pace and timing of further rate hikes. "The elimination of negative interest rates in particular signals the BOJ's confidence that Japan has emerged from the grip of deflation."
Japanese shares rose after the decision. The yen fell below 150 per dollar, as investors took the BOJ's dovish guidance as a sign the interest rate differential between Japan and the United States likely will not narrow much.With inflation exceeding the BOJ's 2 per cent target for well over a year, many market players had projected an end to negative interest rates either in March or April.
Under Kuroda, the BOJ deployed a huge asset-buying programme in 2013, originally aimed at firing up inflation to a 2 per cent target within roughly two years.
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