The Bank of Japan took a decisive step at the meeting on March 19, 2024, announcing the refusal of negative interest rates. This is the first such decision over the last 17 years. At the same time, the interest rates on Overnait loans were increased.
Overnait loans were raised to the range from 0% to 0.1%, compared to the previous range from -0.1% to 0%. This change is marked as significant, since the Japan Bank first abandoned the negative interest rates that were first introduced in 2016.
Hideo Kumano, the Chief Economist of the Dai-Nichi Life Research Institute, commented on this decision as "a serious change in politics, much larger than expected."
The reason for this change in the policy of the Bank of Japan was the approval of the largest employers of the country with large trade unions to increase wages by 5.28%. This is the greatest increase in the last 33 years. Companies and trade unions have avoided a significant increase in wages for many years with caingation for the competitiveness of companies.
Japan's monetary policy played an important role in the rapid fall of Yena, which greatly struck households. Overnait, or night loans, played an important role in this policy, providing temporary financial opportunities for a short time.
Further changes in the monetary policy of the Bank of Japan can have a major impact on the country's economy and the international financial market.
