Implications Following The End of Negative Interest Rates In Japan

On March 19, 2024 the Bank of Japan (BOJ) made three major announcements:

1. A 0.1-0.2% increase in its policy rate (unsecured call rate) to a range of 0-0.1%. This ends Japan’s unique position as the last major developed market with negative interest rates.
2. The abolition of its yield curve control policy, which aimed to suppress short- to medium-term rates (which affect corporate borrowers), without depressing long term yields too much (which would reduce returns for pension funds and life insurers)
3. The end of the BOJ’s purchases of ETFs/REITs, which had formed part of its stimulus program.

In this Japan update from Shiro Hayashi, we discuss the implications following the end of negative interest rates in Japan. Read the piece here.