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Bank of Japan introduces negative interest rate


The Bank of Japan has surprised investors by lowering its interest rates to spur banks to lend amid a weakening economy.

The benchmark rate is now at -0.1 per cent meaning commercial banks will be charged by the central bank for some deposits. This will start on 16 February.

The central bank, led by Haruhiko Kuroda, also said it will push the rate even lower “if judged as necessary”.

However, the decision to introduce negative rates was not unanimous, with five policy board members voting in favor against four opposing the move.

In its economic outlook, the BoJ said although Japan’s economy continues to recover “moderately”, uncertainties over developments in emerging markets and China will remain.

It said: “Global financial markets have been volatile against the backdrop of the further decline in crude oil prices and uncertainty such as over future developments in emerging and commodity-exporting economies, particularly the Chinese economy.

“For these reasons, there is an increasing risk that an improvement in the business confidence of Japanese firms and conversion of the deflationary mindset might be delayed and that the underlying trend in inflation might be negatively affected.”



Schroders to merge Japan funds

Schroders is to merge two of its Japan funds, bringing the £29.5m Schroder Japan Alpha Plus fund into Andrew Rose’s £2.15bn Schroder Tokyo fund. Subject to FCA approval, Schroders will combine the two funds as the Japan Alpha Plus fund, run by Nathan Gibbs, has shrunk in assets. The Schroder Japan Alpha Plus fund has underperformed the […]

Hugh Young: The rise of corporate governance in Japan

The scandal at Japanese optics and healthcare company Olympus in 2011 served to highlight the historically poor standards of corporate governance in Japan. Olympus’s then British chief executive Michael Woodford became whistleblower, revealing a £1.1bn accounting fraud he alleged had been taking place since 2006. Woodford was fired because he wanted Olympus to come clean […]


Japanese stocks rise after BoJ decision

Shares in Japan reached a two-month high after the Japanese central bank decided to stick to its current monetary easing policy. The Nikkei 225 closed up 0.78 per cent at 19,083 points after an initial fall of more than 0.4 per cent when the decision was announced. As a result of the central bank’s meeting […]


Martin Currie acquires ex-GAM star’s $167m Japan fund

Martin Currie has hired ex-GAM manager Paul Kirkby and will acquire his $167m Japan long-short fund. Kirkby and some of his team from boutique PK Investment Management will join Martin Currie and, subject to regulatory approval, the asset manager will acquire his Cayman-domiciled Japan long-short fund. Kirkby will lead the Martin Currie Japan long/short investment offering alongside […]

When is £1m not £1m?

Neil Jones is technical support manager with Canada Life’s ican Technical Services Team. Canada Life offers a range of wealth management solutions, including retirement income planning, estate planning and investment solutions from a choice of jurisdictions, including the UK, Isle of Man and Republic of Ireland. The residential nil-rate band (RNRB) was first announced in […]


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