Japan's Central Bank Raises Interest Rates for First Time Since 2007, Ending Negative Rates Regime

Japan's central bank raised interest rates for the first time since 2007, ending the world's last negative rates regime. The bank also abolished its yield control curve policy on signs of wage gains.

On March 18, 2024, the Bank of Japan (BOJ) made history by raising its interest rates for the first time in 15 years. This decision marks a significant shift from the negative rates policy that has been in place since 2016. The new short-term interest rates now stand at around 0 to 0.1%, representing a stark contrast from the previous -0.1%.

End of Yield Control Curve Policy

Simultaneously, the BOJ has announced the abolition of its radical yield curve control policy for 10-year Japanese government bonds. This policy had been utilized to target longer-term interest rates through the buying and selling of bonds as necessary. The move signifies a departure from the unconventional measures adopted in recent years.

These decisions come in response to early signs of robust wage gains this year, indicating a shift in the economic landscape of Japan. Stay tuned for further updates on this development.

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