BOJ shocks markets with negative interest rates move

The Bank of Japan on Friday shocked financial markets by adopting negative interest rates to forestall risks that global market volatility could damage business confidence and revive a deflationary mindset.

PHOTO: REUTERS

JAN 29, 201612:13 PM

[TOKYO] The Bank of Japan on Friday shocked financial markets by adopting negative interest rates to forestall risks that global market volatility could damage business confidence and revive a deflationary mindset.

In a 5-4 vote, the central bank decided to charge 0.1 per cent interest on current accounts that financial institutions hold at the BOJ. "The BOJ will cut interest rates further into negative territory if judged as necessary," the BOJ said in a statement announcing the decision.

BOJ Governor Haruhiko Kuroda will hold a news conference at 3.30pm. (0630 GMT) to explain the policy move.

REUTERS