FLJP - The Paradox Of Japan's Negative Rates
2024-04-04 03:59:00 ET
Summary
- After the Bank of Japan cut rates below zero in January 2016, the yen gained 10% against the US dollar.
- The Nikkei 225 slumped in January and February 2016 when the BoJ initially set rates negative and then rallied once negative rates ended.
- Higher rates could have the impact of slowing growth, as they do elsewhere, but that would likely require rates much higher than the current zero to 10-basis point range.
Originally posted on April 02, 2024
By Erik Norland
At A Glance
- After the Bank of Japan cut rates below zero in January 2016, the yen gained 10% against the U.S. dollar
- The recent hike in interest rates may end up further stimulating, instead of slowing, economic growth