Bank of Japan sends interest rates negative

Bank of Japan sends interest rates negative - ABC News (Australian Broadcasting Corporation)

What would this even mean for the average person. You'd be penalized for saving money, and encouraged to spend it to pump money into the economy?

You'd be incentivized to borrow money to also pump into the economy?

 

Yep!

 

Exciting times ahead

 

It means their economy is so totally stuffed that they've now moved into a territory that doesn't really exist within traditional economics...

 

I remember about 15 years ago they called it the lost decade. It's interesting that more than a decade later it's still in limbo. There's literally a whole generation that has never seen good economic times.

 

I guess this means export driven companies are about to get a boost on the stock market?

 

Japan with ageing population, no immigration and declining birth rate should take a leaf out of Costellos book and bring on the baby bonus rather than pumping their economy with cheap credit. Would actually work and be cheaper for them

 

Would be great if the bank started paying me interest for all the money I owe them. Who would be laughing then?

PS. I don't want this to happen

 

Lol

 

20 years ago: that's going to take too long, we need a solution now

10 years ago: that's going to take too long, we need a solution now

Present day: that's going to take too long, we need a solution now

 

The joint is too overcrowded as it is - 127 mill on that tiny area?

Google

 

Wait till they are negative 5%, then find a way to borrow and get the money out of the country (sounds like Yen is not much chop if they start paying you to take it).

 

Does it mean you would pay interest if you had money in the bank?

 

I thought it meant the bank pays you interest for money you borrowed.

 

Surely both. Only in Japan.
What a pity. But they are one of the few nationalities left where 'most people' are thorough breds. Their baby boom generation must be more overwhelming than here, the US or Europe.

 

Japan is actually a multicultural country

 

yep
money sitting idle is the last thing they want

 

This is the equivalent of Japan's reserve bank is charging the bank for excess liquidity as a measure to incentivise the retail banks to start lending.

This is not a measure which will affect the average punter.

 

Japan's got some serious economic headwinds. They still haven't managed to get rid of that huge public debt. The original idea was to inflate it away, but that hasn't worked.

Most people are not sure what's holding them back - obviously there's the usual suspects of aging population, lost of competitiveness against China, Korea and South East Asia. But they remain an innovative country, hard working relative to most western nations, their fixed income securities are lapped up by some class of investors. Perhaps because it's an Americano-Europa dominated finance economy, Japan hasn't been able to just spend its way out of debt since people no longer 'believe' in the fiat or the system, unlike America. I mean where in the world can most people do nothing, issue pieces of paper (these days they just add some '0s' to your 'bank account' whatever that really is), and trade it for the goods produced by hard working people in another country?

Although China is heading into the same territory now. Interesting times ahead.

 

Actually some other countries have negative interest rates, Switzerland is -0.75 % (lower than Japan), so banks depositing money with the SNB have to pay 0.75% interest. My Swiss bank account however pays 0.01%.