The Bank of Japan ends its negative interest rate policy, opting for its first hike in 17 years

FILE - Governor of the Bank of Japan Kazuo Ueda speaks during the presidency press conference at the G7 meeting of finance ministers and central bank governors, at Toki Messe in Niigata, Japan, Saturday, May 13, 2023. Japans central bank raised its benchmark interest rate Tuesday, March 19, 2024, for the first time in 17 years, ending a longstanding policy of negative rates meant to boost the economy.

Another factor supporting the shift: Japanese companies have announced relatively robust wage hikes for this year's round of negotiations with trade unions. The Japanese central bank's policy is quite different from those of the U.S. Federal Reserve and the European Central Bank. Both have been moving to lower interest rates after rapidly raising them to clamp down on inflation.

Japan recently became the world’s fourth biggest economy, slipping behind Germany, in terms of its nominal gross domestic product, or GDP. The U.S. economy is the largest, followed by China, which overtook Japan over a decade ago.

Source: Financial Digest (financialdigest.net)

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