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BOJ adopts negative interest rates

The nine member board voted 5-4 to put an interest rate of -0.1 percent on current accounts held at the central bank.

TOKYO -- The Bank of Japan decided to adopt negative interest rates at its policy meeting on Friday, voting 5-4 to apply an interest rate of -0.1 percent on current accounts that financial institutions hold at the central bank. At the same time, the BOJ revised its inflation forecast for fiscal 2016 down to 0.8% from a previous level of 1.4%.

     The surprise move triggered a rally on the Tokyo Stock Exchange, with the Nikkei 225 rising almost 600 points at one stage, but then falling back sharply as investors contemplated the effects of the new measure. The yen weakened by as much as 2.2% against the dollar.

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