Until now, the main tool of Japanese monetary policy was through widespread asset purchases.
Here is a graph from the WSJ on how much they were buying:
Wednesday, 21 September 2016
2016-05 The strange world of negative interest rates
The Bank of Japan announced a new policy today. Faced with persistent deflation (i.e. falling prices) it announced the goal for monetary policy will be keeping the return on 10 year bond equal to zero. The response was immediate: the return on a 10-year bond went from -0.06% to -0.03%.
Until now, the main tool of Japanese monetary policy was through widespread asset purchases.
Here is a graph from the WSJ on how much they were buying:
Until now, the main tool of Japanese monetary policy was through widespread asset purchases.
Here is a graph from the WSJ on how much they were buying:
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