Asian markets surge after Bank of Japan's shock move to negative interest rates – live

Discussion in 'Market News' started by Lily, Jan 29, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    Stocks and currencies yo-yoed wildly in Asia Pacific after Japan paved the way for yet more quantitative easing. Follow the latest updates live

    6.50am GMT

    Kuroda adds:

    Japan’s economy continues to recover moderately and the underlying price trend is improving steadily. But there’s a risk recent further falls in oil prices, uncertainty over emerging economies, including China, and global market instability could hurt business confidence and delay the eradication of people’s deflationary mindset.

    The BOJ decided to adopt negative interest rates ... to forestall such risks from materialising.

    6.47am GMT

    Kuroda has told journalists in Tokyo that the decision to adopt negative interest rates was taken with the 2% inflation target in mind, and in consideration of risks to Japanese business confidence posed by factors that include concern over the health of the global economy.

    Kuroda refused to comment on Thursday’s resignation of the economy minister, Akira Amari, but added:

    As before, the aim is to see Abenomics succeed.

    6.44am GMT

    Kuroda is working his way through the statement issued earlier by the Bank of Japan, according to our man in Tokyo, Justin McCurry.

    The decision sent the yen plunging by up to 2% as capital seeks higher rates of return elsewhere.

    6.37am GMT

    Bank of Japan governor Haruhiko Kuroda is speaking now ...

    Updates shortly.

    6.32am GMT

    Stock markets in Asia Pacific have yo-yoed wildly in the wake of the BOJ move, which spells yet another round of monetary easing in Japan.

    Generally speaking, traders have embraced quantitative easing in its various forms across the globe as it means cheap money and rising asset prices.

    6.18am GMT

    Earlier on Friday, official figures showed inflation in Japan was 0.5%, way off the bank’s target of 2%.

    The BOJ hopes that the rates decision will encourage commercial banks to lend more, rather than keeping cash at the BOJ, and stimulate investment and growth.

    Japan’s economy has continued to recover moderately, with a virtuous cycle from income to spending operating in both the household and corporate sectors, and the underlying trend in inflation has been rising steadily.

    Recently, however, 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.

    6.11am GMT

    The BOJ governor Haruhiko Kuroda will give a press conference in about 30 minutes which should help explain the thinking behind the decision, which sneaked through on a 5-4 vote of the bank’s board.

    The BOJ said it was adopting an interest rate of -0.1% for new excess reserves parked at the bank by financial institutions.

    The BOJ will cut the interest rate further into negative territory if judged as necessary.

    5.42am GMT

    Hello and welcome to the business live blog. It’s been a very eventful night in the world of finance with Japan making the surprise (to some, at least) decision to adopt negative interest rates.

    More on the detail of the decision very shortly but here’s a catch-up on what has happened:

    Related: Bank of Japan shocks markets by adopting negative interest rates

    Continue reading...

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