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On March 19, Japan’s central bank ended its latest economic experiment. The BOJ scrapped the world’s last negative interest rate policy, with the first rate hike since 2007. The move ends the most aggressive monetary stimulus program in modern history, signaling confidence that the country is finally leaving behind years of deflation and economic stagnation. How will this massive shift disrupt everyday lives across the country and beyond?
This Bloomberg clip looks at Japan exiting negative interest rates, and the implications of this for the Japanese economy. It provides an excellent overview of how the end of the Japanese economic miracle led to decades of deflation, and decades of quantitative easing and negative interest rates.
However, what does the decision to adopt positive interest rates have for the wider Japanese economy. It's an excellent piece of economic history and gives and insight into why deflation is so problematic, and difficult to overcome.