The Bank of Japan introduced a negative interest rate policy in order to achieve a price stability target of 2 percent at the earliest possible time.
At the Monetary Policy Meeting held Friday the policy board of the Bank of Japan has decided to introduce quantitative and Qualitative monetary easing with a negative Interest Rate.
In a statement released by the BOJ, the central bank will pursue a program of monetary easing by making full use of possible measures in terms of three dimensions: quantity, quality, and interest rate.
The BOJ will also adopt a three-tier system in which the outstanding balance of each financial institution’s current account at the bank will be divided into three tiers and a positive interest rate, a zero interest rate, or a negative interest rate will be applied, respectively for them. As a result, the bank of Japan will apply a negative interest rate of minus 0.1 percent to current accounts that financial institutions hold at the bank.
Yen Down 2 %
Asian shares rose to a two-week high and the yen weakened on the news.
Japanese bonds rallied after the central bank decision, pushing yields to record lows, and the yen declined more than 2 percent against all of its major counterparts. Crude oil rallied after Russia’s energy minister said OPEC may meet to discuss output cuts.
The MSCI Asia Pacific Index advanced for a third day as Chinese equities trimmed their biggest monthly drop since 2008. Energy stocks surged as U.S. crude extended its advance toward $34 a barrel. The ringgit climbed to a three-month high as the rebound in oil brightened prospects for Malaysia.
The Bank of Japan introduced a negative interest rate policy in order to achieve a price stability target of 2 percent at the earliest possible time.
At the Monetary Policy Meeting held Friday the policy board of the Bank of Japan has decided to introduce quantitative and Qualitative monetary easing with a negative Interest Rate.
In a statement released by the BOJ, the central bank will pursue a program of monetary easing by making full use of possible measures in terms of three dimensions: quantity, quality, and interest rate.
The BOJ will also adopt a three-tier system in which the outstanding balance of each financial institution’s current account at the bank will be divided into three tiers and a positive interest rate, a zero interest rate, or a negative interest rate will be applied, respectively for them. As a result, the bank of Japan will apply a negative interest rate of minus 0.1 percent to current accounts that financial institutions hold at the bank.
Yen Down 2 %
Asian shares rose to a two-week high and the yen weakened on the news.
Japanese bonds rallied after the central bank decision, pushing yields to record lows, and the yen declined more than 2 percent against all of its major counterparts. Crude oil rallied after Russia’s energy minister said OPEC may meet to discuss output cuts.
The MSCI Asia Pacific Index advanced for a third day as Chinese equities trimmed their biggest monthly drop since 2008. Energy stocks surged as U.S. crude extended its advance toward $34 a barrel. The ringgit climbed to a three-month high as the rebound in oil brightened prospects for Malaysia.