(MENAFN- Asia Times) Japan implemented negative interest rates in January 2016, surprising global markets with an unconventional monetary policy to combat deflation and stimulate economic growth.
The policy, implemented after other monetary moves failed to have the desired effects, has sought to encourage banks to lend, consumers to spend and businesses to invest by penalizing holding excessive reserves.
Eight years later, this monetary experiment could be coming to an end – as soon as this month. Reuters has reported that a“growing number” of Bank of Japan policymakers are leaning in that direction amid expectations of hefty pay hikes in this year's annual wage negotiations.
If Reuters and others predicting a policy shift have it right, then what can be expected after negative rates are made positive?
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