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The Bank Of Japan Once Again Implemented Zero Interest Rate Policy After A Lapse Of 4 Years.

2010/10/6 17:44:00 65

The Bank of Japan announced on the 5 day that the inter-bank unsecured overnight lending rate fell from 0.1% to 0.1%.

This is the Bank of Japan once again implemented zero interest rate policy after a lapse of 4 years, intended to prevent further appreciation of the yen and the economic downturn.

The Bank of Japan said in a statement issued on the same day that

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In a more relaxed financial environment, the Bank of Japan decided to implement a comprehensive loose financial policy consisting of three measures: first, the level of inter-bank unsecured overnight lending rates will be reduced to zero from 0.1% from now on; second, the zero interest rate policy has been implemented before deciding the price situation has stabilized, but the premise is that there will be no other risks and problems at the financial level; third, it specifically studies the establishment of asset purchase funds, and provides a common guarantee fund for the purchase of treasury bonds, corporate bonds and other financial assets, with a fixed size of 35 trillion yen (419 billion US dollars).

The statement also said that although the Japanese economy is still recovering slowly, but because of overseas economic slowdown and the appreciation of the yen and other negative impact on enterprises, the recovery showed a weakening trend.

The central bank is expected to weaken the policy stimulus effect and slow down the improvement of the economic situation, so that Japan's future economic trend will return to a slow recovery.

Since August this year, the Japanese Yen

exchange rate

The Japanese government and central bank have coordinated actions to prevent further appreciation of the yen.

In August 30th, the Bank of Japan decided to increase the amount of capital injection to the market from 20 trillion yen to 30 trillion yen by means of open operation.

In September 15th, the Japanese government began to intervene in the foreign exchange market, and once the Japanese yen to the dollar exchange rate fell to 85 to 1.

However, the Japanese government and industry have strongly urged the Bank of Japan to take further loose financial policies as the yen has risen to a level of 83 to 1 to the dollar.

financial crisis

Since the outbreak of the outbreak, the Bank of Japan lowered its interbank overnight lending rate from 0.5% to 0.3% in October 2008 and further reduced to 0.1% in December.