Bank of Japan Raises Rates Again, Ends Negative Interest Rate Policy

IconCryptoNewsTerminal Staff30 Jul, 2024

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Bank of Japan Raises Rates Again, Ends Negative Interest Rate Policy

For the second time in three months, the Bank of Japan (BOJ) has raised interest rates. The central bank increased its target for the 10-year Japanese government bond yield from 0~0.1% to 0.15~0.25%. This move marks a significant shift in the BOJ's monetary policy, which has been focused on maintaining ultra-low interest rates to stimulate economic growth since 2016. The BOJ's decision to hike rates was driven by concerns about rising inflation. Japan's consumer price index (CPI) rose by 4% in January, the highest level in four decades. The BOJ believes that raising rates will help to curb inflation and bring it back to its target of 2%. The BOJ's decision to end its negative interest rate policy is also a significant development. Negative interest rates have been a key part of the BOJ's monetary policy toolkit since 2016. However, the policy has come under increasing criticism for its potential to harm the financial system.

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