Japanese savers faced the shock of negative interest rates on their bank balances on Friday, as the Bank of Japan’s monetary policy committee took the unprecedented move to get the nation spending.
Five of the nine members of the BOJ Policy Board were in favor of the rate of minus 0.1 percent. The news followed a two-day meeting by the board.
Negative interest rates punish banks for holding cash. This encourages them to get rid of it in the form of loans, which aids businesses and people looking to buy a home.
It was the BOJ’s first move on its benchmark move in five years.
Full article: Japan adopts negative interest rate in bid to spur growth (The Japan Times)