Bank of Japan Ends Negative Interest Rate Regime: What it Means for the Economy and Markets

The Bank of Japan has taken a significant step by ending its negative interest rate regime, aimed at encouraging bank lending and countering deflation. This move comes as strong wage gains have helped the central bank to achieve its inflation goal. The policy shift will have varied effects on the economy and financial markets, presenting both benefits and challenges. This measure, which means depositors pay interest to banks, was originally introduced by European central banks to combat declining prices in the 2010s. The termination of the program reflects the changing economic landscape and heralds a new phase for the Bank of Japan.