The Bank of Japan has joined to ECB in moving interest rates below zero - the BoJ set the rate for some deposits being held by the central bank at -0.1% following a monetary policy meeting that concluded on Friday. +
The unexpected decision passed by 5 votes to 4 and means that commercial banks will effectively be charged to hold money at the central bank in an effort to encourage them to lend more money.
The Bank of Japan, which has been engaging in a huge monetary easing programme under Governor Haruhiko Kuroda as part of Prime Minister Shinzo Abe's 'Abenomics' programme, did not rule out lowering rates further.
The central bank said it was yet again delaying the forecast for when inflation might reach its target of 2%, to the first half of the 2017 fiscal year, because of declining oil prices.
Data released on Friday showed consumer prices, excluding fresh food, were close to zero (0.1%) in December. *
In a blow for Prime Minister Shinzo Abe and his 'Abenomics' economic reforms, Japan's GDP declined 1.6 percent year on year between April and June.
Exports of goods and services collapsed 16.5 percent year on year.
Japan's economic up and downs
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The Nikkei 225 was up 0.28 per cent at 20,868.03 - the highest closing since December 5th 1996.
The Nikkei was boosted by positive noises from the Greece crisis talks in Europe.
The index is up around 20 per cent so far this year as Japan's economy recovers from a sales tax induced recession last year.
- Japan's GDP grew 3.9 per cent in the first three months of this year - up from a preliminary estimate of 2.4 per cent.
Japan's economy grew by 2.4 per cent year on year in the first three months of the year, well above an initial estimate of 1.1 per cent.