May 28, 2016

Japan: The Dramatic Interest Rate Drop

   May 28, 2016

Japan: The Dramatic Interest Rate Drop

Bank_of_Japan_interest_rate_changes_Rate_TMMChart.png

Trader’s remarks: Japan’s mission to banish deflation, which has dogged the economy for the best part of two decades, has faced headwinds both at home and externally. As seen in the chart, Japan has had to enforce negative interest rates this year in its attempt to fight deflation. However, the headline consumer price index fell 0.3% year on year in April, after a fall of 0.1% in March. Unfortunately, this fall highlights the declining credibility of the BoJ to fight deflation.

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