Japan’s central bank has signalled progress in its efforts to boost the country’s economy by ending vast swathes of a massive stimulus programme.
Policymakers in the country, which has struggled for decades to achieve price growth to bolster activity, took the decision eight years ago to impose a negative interest rate of -0.1%.
The aim behind it was to encourage spending in the economy rather than saving, with banks even facing charges for some reserves to be parked with the Bank of Japan.
The bank’s decision to impose a new target rate around zero marked its first interest rate increase in 17 years.
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While its economy remains fragile, inflation is running above the bank’s 2% target, partly aided by healthier wage increases which have been a focus of efforts to end the era of economic malaise.
The negative interest rate policy had combined with other extraordinary measures to inject money into the economy and keep borrowing costs low.
