Bank of Japan Partially Reduces Monetary Easing... "Effectively a Rate Hike"

[Asia Economy Reporter Lee Ji-eun] The Bank of Japan, which had maintained large-scale monetary easing policies and ultra-low interest rates to stimulate the economy, has decided to shift its monetary policy stance.

According to the Nihon Keizai Shimbun on the 20th, the Bank of Japan (BOJ) announced its intention to revise its accommodative monetary policy after concluding a two-day monetary policy meeting.

[Image source=Yonhap News]

On this day, the BOJ decided to change the fluctuation range of long-term interest rates from 'around 0 to ±0.25%' to 'around ±0.5%'. The short-term interest rate was maintained at -0.1% as before.

The Nihon Keizai Shimbun analyzed that raising the upper limit of long-term interest rates to 0.5% effectively amounts to an interest rate hike.

Since 2016, the BOJ has been implementing a policy of unlimited government bond purchases to keep Japan's 10-year government bond yields moving between 0% and 0.25%.

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