Bank of Japan introduces negative interest rate to boost economy 

Bank of Japan

The Bank of Japan building is reflected in a telephone box in Tokyo on Oct. 7, 2015.  

(Franck Robichon / European Pressphoto Agency)

The Bank of Japan on Friday introduced a negative interest policy in a move to boost a stumbling recovery in the world’s third-largest economy.

The central bank said it is imposing a 0.1% fee on some deposits left with the central bank, effectively a negative interest rate.

It hopes that will encourage commercial banks to lend more and stimulate investment and growth.

The move had an immediate effect on financial markets. Japan’s benchmark Nikkei 225 stock index, which had been down about 0.8% at midday, shot higher. The Japanese yen slid, with the U.S. dollar rising to 120.40 yen from about 118.50 earlier in the day.


The Bank of Japan said in a statement that it would divide banks’ deposits into three tiers, with categories earning positive, zero and negative interest rates.

It said the policy would continue as long as needed to achieve an inflation target of 2%. In the meantime, the Bank of Japan pushed back its timeframe for achieving that goal from late 2016 to mid-2017.

Earlier Friday, data showed Japan’s core inflation rate for 2015, excluding volatile food prices, at 0.5%.



Retail workers would get double pay on Thanksgiving under California bill

Moratorium on Aliso Canyon natural gas operations gets Senate approval

State audit berates City of Industry accounting controls and questions employee charges

Get our weekly California Inc. newsletter