March, 15 2016 by lsr team

BoJ keeps monetary policy unchanged

LSR Blog - BoJ keeps monetary policy unchanged

The Bank of Japan left monetary policy unchanged today. The effect of negative interest rates on the currency in January was the opposite of that intended: the central bank’s aggressive adoption of negative deposit rates merely fuelled global angst at a critical juncture, driving repatriation flows into Japan and pushing up the currency. The ECB’s policy easing last week had a more beneficial effect on asset prices but has again left the currency unchanged, reinforcing the message for the BoJ. For Japan, where currency moves dominate the equity market, it’s lose-lose.

Moreover, the negative interest rate policy has generated a host of side-effects. Click below to find out more and why we think fiscal policy will likely re-emerge in 2016.