ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print

New front in currency wars

The recent move by the Bank of Japan to institute a negative deposit rate prompts the question as to its implications for other central banks, including the European Central Bank.

     The ECB last eased policy in December when it cut its own deposit rate for banks from -0.2% to -0.3% and extended its asset purchase program. It disappointed markets, which had been led by comments from ECB President Mario Draghi to expect a larger cut in the deposit rate and for a faster pace of asset purchases. As a result of the disappointment, financial markets tightened monetary conditions. The effective exchange rate of the euro has appreciated by almost 5% since just before the ECB meeting, for example.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more