NATIONAL NEWS
By Thomas Shomaker
On Tuesday 19 March, the Bank of Japan announced it is raising interest rates for the first time in 17 years.
The new target policy rate is 0-0.1% as opposed to minus 0.1 and caps off a long-standing policy of lowering interest rates that began with the onset of the global financial crisis in late 2008.
The announcement came out in a series of reports explaining the Bank of Japan’s rationale for the interest rate adjustment and outlines of imminent purchases of government securities and bonds.
Citing its own January 2024 study among other sources, the Bank of Japan said in one of its 19 March reports that “the virtuous cycle between wages and prices has become more solid” and therefore the longstanding policy of quantitative easing had fulfilled its purpose and could be retired.
Although the 19 March announcement is a major policy change, Japan’s interest rates remain much lower than in other peer countries.
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Bank of Japan
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