look news india
Tokyo: After a period of eight years, the Bank of Japan has raised interest rates for the first time since 2007, ending the era of negative interest rates. Bank of Japan Governor Kazu Ueda ended easy monetary policy on Tuesday, pushing interest rates near zero.
The country's weak economic recovery is forcing the Bank of Japan to move slowly on raising interest rates.
The Bank of Japan had a negative interest rate policy for the past few years to support the country's sluggish economy. Japan adopted an unconventional monetary policy of low rates to support the economy.
Under the negative interest rate policy, it charged a 0.10 percent fee on deposits made by financial institutions with the Bank of Japan above a certain limit.
The new interest rate in Japan has been fixed between 0-0.1 percent. The interest rate has been increased for the first time after a period of 17 years. An economist at BofA Securities said that the increase in interest rates will have a very minor impact on the economy. “We do not expect funding costs and home mortgage rates to increase significantly,” he said.
Japan is believed to have ended the negative interest rate regime, with inflation above the two percent target. Another analyst said today's decision by the Bank of Japan is a big blow to global financial markets as Japanese investors who were stashing money abroad to get returns will start investing in Japan again.