Bank of Japan Adopts Negative Rates, Keeps Asset-Buying Target
- Central bank continues its record asset-purchase program
- Data out Friday was unexpectedly bad for output, spending
Weighing the Impact of Kuroda’s Negative Rate Move
This article is for subscribers only.
Bank of Japan Governor Haruhiko Kuroda sprung another surprise on investors Friday, adopting a negative interest-rate strategy to spur banks to lend in the face of a weakening economy.
The move to penalize a portion of banks’ reserves complements the BOJ’s record asset-purchase program, including 80 trillion yen ($666 billion) a year in government-bond purchases, which was kept unchanged at the board meeting. By a 5-4 vote, Kuroda led his colleagues to introduce a rate of minus 0.1 percent on certain excess holdings of cash.