EXPLAINER: What's up with the Bank of Japan's unique track?
Even as the Federal Reserve and the world’s other central banks raise interest rates to try to curb inflation, the Bank of Japan has stood firm, keeping its key interest rate at minus 0.1%
TOKYO (AP) — Even as the Federal Reserve and the world’s other central banks raise interest rates to try to curb inflation, the Bank of Japan has stood firm.
Since 2016, Japan's key interest rate has been minus 0.1%. The world’s third-largest economy has been battling deflation, or a continuous downward spiraling of prices, for years. So, at a time when surging prices prevail in much of the world, Japan also is facing inflationary pressures, but on a much more modest scale.
Low interest rates are designed to make borrowing cheaper, encouraging investment and spending. Your hard-earned money in the bank won’t be earning much interest.
The big question is: What will the Bank of Japan, which is holding a policy meeting Thursday and Friday, do next?
